The government on Wednesday gave ex-post facto clearance to implementation of the Special Banking Arrangement (SBA) of Rs10,000 crore for payment of outstanding claims towards fertiliser subsidy in 2016-17.
The decision was taken at the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi, said an official release. “The CCEA has also approved that, in future, the Department of Fertilisers would avail the SBA with the concurrence of the Department of Expenditure,” it added.
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. To make funds available to fertiliser companies against their subsidy claims, the finance ministry had approved the SBA of Rs10,000 crore with government interest liability limited to G-Secs rate.
An SBA was worked out with State Bank of India (SBI) for Rs10,000 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 Rs9,969 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 Rs80.9 crore was paid to SBI.