Fert subsidy arrears at end of 2013-14 are Rs 30,000 cr

Fertiliser subsidy arrears at the end of 2013-14 are estimated at Rs 30,000 crore, the same as the previous year's level.
The outstanding at the end of 2012-13 was about Rs 30,000 crore, including Rs 22,000 crore carried over from 2011-12.
"About Rs 30,000 crore arrears of fertiliser subsidy till financial year 2013-14 will be carried over to the current fiscal," a source said.
Sources said subsidy arrears at the end of 2013-14 were at the previous year's level mainly due to a 12 per cent decline in urea imports to 7.08 million tonnes (MT) in 2013-14. In 2012-13, the country had imported 8.04 MT of the soil nutrient.

As the fertiliser industry was facing a cash crunch in 2013-14, the government had made available special banking arrangements (SBA)-- Rs 5,500 crore twice and Rs 9,000 crore.
After making payments till July in the last fiscal, the government exhausted urea subsidy allocated for the entire fiscal. The subsidy allotment for phosphatic and potassic (P&K) fertilisers was utilised by December-end.

Sources said the Fertiliser Ministry had hardly any money left with itself to pay subsidy bills for the third and fourth quarters of the 2013-14.
Non-payment of subsidy and freight bills on time means non-recovery of a significant portion of cost of production or imports, Fertiliser Association of India Chairman R G Rajan had said at its annual conference.

Finance costs for fertiliser companies are set to rise as delayed subsidy payments force them to borrow money to run operations.