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Minister of State for Planning (IC) and Chemicals & Fertilizers, Rao Inderjit Singh, in a written reply to a question on details of fertiliser subsidy arrears to be given to the fertiliser companies and corrective measures being taken by the Government, in Lok Sabha today, informed that the Department of Expenditure has conveyed its approval for the Special Banking Arrangement (SBA) upto Rs. 7000 crores from nationalised banks to meet fertiliser claims from September 2017 to February 2018.
“The Government releases subsidy to the fertiliser companies on a regular basis subject to availability of budget. Whenever there is a shortage of funds, the Government tries to liquidate the pending subsidy by arranging loans under a Special Banking Arrangement (SBA). The delay in release of fertiliser subsidy is due to paucity of funds and non-receipt of Quality Certificate from State governments,” the Minister said.
Singh informed that the Department of Expenditure had given approval of an SBA upto Rs. 7000 crores by following two conditions, the Department of Fertilizers should use only minimum required amount making sure that amount raised is actually utilised during current Financial Year and 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 fertiliser companies, whichever is lower.