companies to reduce their cost of borrowings and increase the efficiency,” Chander said. A similar arrangement was made in 2008-09, when fertiliser firms raised Rs 22,000 crore in bank credit – from State Bank of India and State Bank of Patiala – in lieu of subsidy payments.
Sources said the fresh proposal would see companies raising loans from state-owned banks this year, too. As per the 2012-13 Budget subsidy allocation, the government had provided Rs 13,398 crore for imported urea, Rs 19,000 crore for indigenous (urea) fertilisers, and Rs 28,576 crore for the sale of decontrolled fertilisers (DAP, MOP and complexes) at a subsidised rate to farmers. The subsidy shortage is especially acute for phosphatic and potassic fertilisers.