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Fertiliser ministry seeks Rs.20,000 crore under special banking arrangement for subsidy payments

Fertiliser ministry seeks Rs.20,000 crore under special banking arrangement for subsidy payments
The fertiliser industry had been waiting for such banking arrangement to clear dues.
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The fertiliser ministry has sought Rs.20,000 crore from the finance ministry under a special banking arrangement (SBA) to clear the pending dues of the fertiliser firms for the current financial year.

InfraCircle was first to report on 7 December that the ministry of chemicals and fertilisers may propose a SBA for settlement of outstanding subsidy bills of manufacturers.

“We were looking forward to second supplementary grants for getting some additional amount towards subsidy payments. However, it was not provided. Hence, we have written to the finance ministry seeking Rs.20,000 crore to make pending subsidy payments to companies,” said a senior government official requesting anonymity.

Former fertiliser secretary Vijay Shankar Pandey had earlier said that the subsidy budget for the current financial year stood at Rs.75,000 crore and the ministry sought additional Rs.20,000 crore from the finance ministry under supplementary grants.

“Pending dues of fertiliser firms currently stand at around Rs.30,000 crore and hence some arrangement needs to be put in place for making payments. However, we have still not heard anything from finance ministry regarding special banking arrangement,” another government official, who did not wish to be named, said.

According to a statement issued by the Press Information Bureau on 14 October 2015, the Cabinet Committee on Economic Affairs had approved SBA for a loan of Rs.7,000 crore with the consortium of public sector banks led by State Bank of India and Punjab National Bank for settlement of outstanding indigenous urea subsidy bills.

Industry has been waiting for such banking arrangement to clear the dues. “Unless some special banking arrangement is made, our subsidy numbers will reach around Rs.5,200 crore as of 31 March 2017,” said Manoj Mishra, chairman and managing director of state-run National Fertilisers Ltd (NFL).

Mishra, who also holds additional charge of Rashtriya Chemicals and Fertilisers (RCF), said subsidy payments for RCF will be slightly less, may be around Rs.4,000 crore.

“This is a concern for us. We have written to the government for at least making special banking arrangement and interest subsidy be given to us. Earlier, also in 2014-15, government provided special banking arrangement to the industry,” Mishra added.

Queries emailed to the spokespersons of the ministry of chemicals and fertilisers, and the finance ministry on 6 January remained unanswered.

Meanwhile, sales of major fertilisers, including urea, di-ammonium phosphate (DAP), muriate of potash (MoP) and complex NPK fertilisers in November touched a four-year high, despite cash crunch due to demonetisation drive. Sales of major fertilisers in November were about 4.981 million tonnes (MT), 9.3% more than 4.557 MT in the same month last year.

 

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