Fertiliser subsidy: CCEA clears Rs 10k cr Special Banking Arrangement

Fertiliser subsidy: CCEA clears Rs 10k cr Special Banking Arrangement

NEW DELHI, DHNS: The Centre on Wednesday gave ex-post facto clearance to the implementation of the Special Banking Arrangement (SBA) of Rs 10,000 crore for payment of outstanding claims towards fertiliser subsidy in 2016-17.

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi also approved that in future, the department of Fertilisers would avail of the SBA with the concurrence of Department of Expenditure, said a statement.

To make funds available to fertiliser companies against their subsidy claims, the finance ministry had approved the SBA of Rs 10,000 crore with government interest liability limited to G-Secs rate.

An SBA was worked out with the State Bank of India for Rs 10,000 crore to meet the outstanding subsidy claims of fertiliser companies. The loan, together with government interest thereon, has been repaid from the Budget Estimate of 2017-18.

Under the SBA, a total loan of Rs 9,969 crore for settlement of outstanding subsidy bills with SBI was raised by the government, the release said. The loan amount, along with interest liability, on the part of the government amounting to Rs 80.9 crore was paid to SBI.

The government is making available urea and 21 grades of P&K (phosphate and potassium) fertilisers to farmers at subsidised prices through fertiliser manufacturers and importers.