Subsidies slashed by 40pc to Rs209 bn for next fiscal

ISLAMABAD: The government has reduced the allocation for subsidies by 40 percent, bringing it down to Rs209 billion for the budget 2020-21, against revised estimates of Rs349.5 billion in the outgoing financial year, the budget document showed on Friday.

Under the International Monetary Fund (IMF) directive to curtail nondevelopment expenditures, economic managers slashed subsidies to petroleum and power sectors -Pakistan State Oil (PSO), Attock Petroleum Limited (APL), and others; K-Electric, Utility Stores Corporation (USC), Pakistan Agricultural Storage and Services Corporation (PASSCO), National Food Security and Research (NFS&R) Division, and others.

The subsidy to USC was reduced from Rs24 billion in the outgoing fiscal year to Rs10 billion for next budget. The government has earmarked Rs30 billion for Naya Pakistan Housing Authority in next fiscal year.

The subsidy for power sector was brought down to Rs124 billion for next fiscal year 2020-21 against revised estimates of Rs201 billion for the outgoing fiscal year. The government had initially envisaged a subsidy for power sector to the tune of Rs191 billion.

For Inter Disco Power differential, the subsidy was reduced to Rs110 billion for the next fiscal year against revised estimates of Rs 162 billion.

The tariff differential for agriculture tube-wells in Balochistan has been cut down to Rs3 billion in the next fiscal year against the revised estimates of Rs8 billion. The subsidy to WAPDA/PEPCO receivable from merged districts of KPK was reduced to Rs10 billion against revised estimates of Rs18 billion. The subsidy to WAPDA on account of tariff differential to AJK was cut down to Rs1 billion in next fiscal year from revised estimates of Rs3 billion for the outgoing fiscal year.

For bill deferment the budget-makers allocated no amount for the next fiscal against revised estimates of Rs10 billion for outgoing fiscal.

The government abolished subsidy to petroleum sector (PSO, APL and others). The subsidy to K-Electric was reduced from Rs59.5 billion for outgoing fiscal year to Rs25.5 billion for next fiscal year. For PASSCO it was decreased to Rs7 billion in next fiscal from Rs15.5 billion in outgoing fiscal. The fertiliser subsidy was cut from Rs7 billion in outgoing fiscal down to Rs6 billion in the next. However, the government allocated Rs2 billion for Metro Bus Subsidy for next fiscal year. ?