Cos hail new payment system for fertiliser subsidies-The Total Investment & Insurance Solutions

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24 March 2017

Welcoming the proposed change in fertliser subsidy payment to companies, the Fertiliser Association of India (FAI)'s Director General Satish Chander on Thursday said subsidy payments to the companies will not be delayed with the new system.

"There is a change in payment of subsidy to fertiliser companies. The subsidy will be paid to the companies after farmers buy fertilisers. On the basis of actual purchase of the farmers, the companies will get 100 per cent subsidies. The Total Investment & Insurance Solutions

"Earlier, we used to get in account 90-95 per cent of subsidies and the balance was paid after completing some formalities," he said. The Total Investment & Insurance Solutions

"In the existing system, subsidy payments were delayed and the industry began the current fiscal with an outstanding of Rs 40,000 crore of subsidy. With the new system of payments, subsidies would be paid actually on the sales and no delay is expected," Chander told BTVi in an interview. The Total Investment & Insurance Solutions

"This is a major change which will take place from June 1," he said.

However, Chander said there would be some transitional problems in the short run. "Whatever stocks companies are having in the field must be exhausted because subsidies were paid for these stocks. The Total Investment & Insurance Solutions

"In the existing prevalent system, fertiliser companies used to get subsidies every month. With the new system, they will get subsidies only in two peak months of the Kharif and Rabi seasons," he said. The Total Investment & Insurance Solutions

Under the new system, subsidy payment would be done for four months of a year, while previously, companies would get subsidy payments round the year.

"This will cause some problem with working capital for companies in short term," he added.

The association looks at the new system as the 'step forward' for the direct transfer of subsidy to the beneficiaries.The Total Investment & Insurance Solutions