The Fertiliser Ministry has sought Rs 12,000 crore under a special banking arrangement (SBA) from the Finance Ministry to pay part of the subsidy bill to the industry which is facing a liquidity crunch.

“A letter has been written by department of fertilisers to department of expenditure, Ministry of Finance, seeking Rs 12,000 crore of SBA to address the liquidity crisis affecting the industry,” a senior official in the Fertiliser Ministry told PTI.

SBA has been sought as the domestic urea subsidy funds have been exhausted. The total requirement of funds is about Rs 30,000 crore which department might seek under supplementary grant.

“We want to make sure that payments are made to the industry on time and until we get additional funds, we have sought Rs 12,000 crore under the SBA,” the official added.

In December, the ministry had sent a proposal to the Finance Ministry seeking to draw SBA loan of Rs 25,000 crore from banks for subsidy payments.

The government has marginally reduced the fertiliser subsidy to Rs 65,971.50 crore for the 2013-14 fiscal from the revised estimate of Rs 65,974 crore in 2012-13.

Of this, the government will provide Rs 15,544.44 crore for imported urea, Rs 21,000 crore for indigenous (urea) fertilisers, and Rs 29,426.86 crore for decontrolled fertilisers (DAP, MOP and complexes) at a subsidised rate to farmers.

Meanwhile, on behalf of the industry, the Fertiliser Association of India has filed a petition in the Delhi High Court seeking 14.75 per cent interest on the delayed subsidy payments.

According to sources, other than for the imported urea, subsidy funds under all other heads (indigenous urea and on sale of decontrolled fertilisers) have been exhausted or is about to be exhausted.

Related Topics