New Delhi : Facing acute cash crunch, the Fertiliser Ministry will arrange for Rs 5,000 crore bank loan for fertiliser companies who have not been paid full subsidy for about six months.
While loan would be taken by the companies, government will bear most of the interest they would have to pay for such borrowing, sources said.
They added that the banking arrangement would be similar to the one offered in 2008-09, when the Ministry had faced a similar situation of lack of funds to pay for subsidy. This will help urea and other fertiliser manufacturing units to tied-over immediate cash flow problems that have arisen because of non-payment of full subsidy.
Fertiliser subsidy is estimated to touch Rs 1,04,000 crore in this fiscal, which also includes arrears.