Rs1.186tr earmarked for subsidies

ISLAMABAD: In order to alleviate the impact of inflation on citizens, the federal government has earmarked a subsidy of Rs1.186 trillion.

Out of Rs1.186 trillion, the government will spend Rs1.036 trillion as subsidy for power sector, Rs1.2 billion for petroleum sector, Rs20 billion for food sector and Rs24 billion for industries & production. In addition, government will also spend Rs104.7 billion in other sectors in the shape of subsidies.

For the power sector, the government allocated Rs1.036 trillion, out of which inter-Discos tariff subsidy will stay at Rs249.136 billion against Rs267 billion budgeted in the outgoing fiscal.

Rs4 billion has been budgeted for next fiscal as subsidy for tariff differential to agri tube-wells in Balochistan, Rs40 billion for merged districts of FATA with KPK, Rs74 billion as tariff differential subsidy for AJK, Rs48 billion for Pakistan Energy Revolving Fund (PERA), Rs125 billion as tariff differential subsidy for K-Electric and Rs1 billion for KESC agri tube-wells in Balochistan under jurisdiction of K-Electric. Rs95 billion will be doled out to IPPs and Rs400 billion as lump provision for power subsidy.

Rs1.2 billion has been earmarked as subsidy for petroleum sector which will be used to bridge shortfall in guaranteed throughout of PEPCO. However, no subsidy will be provided to SNGPL to fill losses that will appear on account of diversion of costly RLNG to domestic consumers. Rs20 billion will be spent as subsidy in food sector, out of which Rs14 billion will be earmarked for PASSCO for wheat reserves stock and Rs6 billion as subsidy to PASSCO on account of cost differential for sale of wheat. The government has also budgeted Rs24 billion for FY26 as subsidy to industries & production. Out of it, Rs3 billion will be utilised for production and supply of urea, Rs9 billion to incentives for Electric Vehicles Scheme and Rs15 billion for sugar subsidy arrears through the Utility Stores Corporation.

Out of other Rs104.7 billion subsidies, Rs20 billion will be extended to Gilgit Baltistan, Rs15 billion for import of fertilizer, Rs1 billion to Neya Pakistan Housing Authority, Rs7 billion as mark-up subsidy and risk sharing scheme, Rs1 billion for refinance and Credit Guarantee Scheme (SME Asaan Finance), Rs5.4 billion for enhancing financing to SME sector, Rs30 billion as mark-up subsidy to support phasing out of SBP refinancing facilities, Rs3 billion for provision of 5km radius gas schemes, Rs5 billion for EFS enhanced plan — Exim-related schemes — Rs5 billion as mark-up for low cost housing, Rs500 billion as housing sector subsidy and Rs7.3 billion as Metro Bus subsidy.