Fertiliser Min gets Rs 10K cr under special banking arrangement

The Finance Ministry has granted Rs 10,000 crore to Fertiliser Ministry under special banking arrangement to provide loan to cash-starved fertiliser companies at reasonable rates.

"Before placing the Budget, the Finance Ministry...granted us Rs 10,000 crore under special banking arrangement (SBA). This has been sanctioned and lot of problems will be mitigated," Fertiliser Minister Ananth Kumar said at a press conference here.

The SBA, under which fertilizer companies can take loans against subsidy receivables, would help the industry meet its fund requirements till the time the cash subsidy is released by the Finance Ministry. Asked about huge backlog of fertiliser subsidy, Kumar said that it has come down to Rs 20,000 crore from the level of Rs 40,000 crore in 2009.

"We will pursue with the Finance Ministry for the release of subsidy and see the dream day without backlog," he said.

Fertiliser subsidy arrears are estimated to be around Rs 35,000 crore by end of this fiscal. In view of delayed payment of subsidy by the government, the industry has to bear about Rs 4,000 crore annually as interest cost. In November last year, the Minister had promised the industry to clear fertiliser subsidy arrears at the earliest.