INR 7000 crore Special Banking Arrangement approved to meet fertilizer subsidy
The Minister said that the Government releases subsidy to the fertilizers companies on a regular basis subject to availability of budget.
Minister of State for Planning (IC) and Chemicals & Fertilizers, Shri Rao Inderjit Singh, in a written reply to a question on details of fertilizer subsidy arrears to be given to the fertilizer companies and corrective measures being taken by the Government, in Lok Sabha, informed that the Department of Expenditure has conveyed its approval for the Special Banking Arrangement (SBA) up to INR 7000 crores from Nationalized Banks to meet fertilizer claims from September 2017 to February 2018.
The Minister said that the Government releases subsidy to the fertilizers companies on a regular basis subject to availability of budget. Whenever there was a shortage of funds, the Government tried to liquidate the pending subsidy by arranging loans under a Special Banking Arrangement (SBA). The delay in the release of fertilizer subsidy is due to paucity of funds and non-receipt of Quality Certificate (Proforma B2) from State Governments, the Minister added.
Shri Singh informed that the Department of Expenditure has given approval of an SBA up to Rs. 7000 crores, subject to the following conditions:
- Department of Fertilizers should use the only minimum required amount making sure that amount raised is actually utilized during current Financial Year.
- The rate of interest to be borne by Government of India shall be 6.84 percent per annum or the actual rate of borrowing by Fertilizer companies, whichever is lower.
(This is a reproduced press release from the government of India as it is. Devdiscourse bears no responsibility towards grammatical or factual errors that may have been presented in the report.)