Cabinet approves Rs.7,000 crore loan for fertiliser subsidy

New Delhi, Oct 14: In a measure of relief to the fertiliser industry, a cabinet panel on Wednesday approved a special banking arrangement for a loan of Rs.7,000 crore for payment of outstanding subsidy to fertiliser firms for 2014-15. "The Cabinet Committee on Economic Affairs (CCEA) has given its ex-post facto approval for a Special Banking Arrangement (SBA) for a loan of Rs.7,000 crore with the consortium of public sector banks led by State Bank of India and Punjab National Bank for settlement of outstanding indigenous urea subsidy bills of fertiliser companies in 2014-15," an official statement said. "This has already been implemented to overcome the liquidity problems of the fertiliser companies. Under the SBA, a total of Rs.6,806.66 crore for settlement of subsidy bills with the two consortiums of public sector banks was raised by the government," it added. With subsidy arrears of Rs.30,000 crore, the Fertiliser Association of India (FAI), has been urging timely payment of subsidy to manufacturers as well as simplification of disbursement procedures.