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CCEA gives nod to Rs 10,000 crore SBA for paying subsidies to fertilizer firms

02 Nov 2017 Evaluate

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi has given its ex-post facto approval for implementation of the Special Banking Arrangement (SBA) of Rs 10,000 crore for payment of outstanding claims on account of fertilizer subsidy in the year 2016-17. CCEA also approved that, in future, the Department of Fertilisers would avail the SBA with the concurrence of the Department of Expenditure.

Under the SBA, a total loan of Rs 9,969 crore was raised by government for settlement of outstanding subsidy bills with State Bank of India (SBI). The loan amount along with interest liability on the part of government amounting to Rs 80.90 crore were paid to SBI. The government is making available fertilizers, namely 21 grades of P&K fertilizers and Urea to farmers at subsidized prices through fertilizer manufacturers and importers.

For making funds available to fertilizer companies against their subsidy claims, the Ministry of Finance had approved the SBA of Rs 10,000 crore with government interest liability limited to G-Sec rate. Accordingly, SBA was worked out with SBI for an amount of Rs 10,000 crore to meet the outstanding subsidy claims of fertilizer companies. The loan amount together with government interest thereon has been repaid from the Budget Estimate (BE) of 2017-18.
 


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