The federal government has drawn up a Rs. 1,190 billion subsidy package for the power sector in the new federal budget.
These subsidies are 104 percent or Rs. 606 billion more than Rs. 585 billion allocated for the current fiscal year.
Key estimates from the government’s document include:
- Rs. 9.5 billion for agricultural tube wells in Balochistan
- Rs. 276 billion for tariff differentials of distribution companies (DISCOs)
- Rs. 65 billion for subsidies in the merged districts
- Rs. 74 billion for Karachi Electric’s tariff differential
- Rs. 108 billion for the tariff differential in Azad Jammu and Kashmir
Despite repeated demands of the International Monetary Fund (IMF) to make policies for reducing circular debt and expediting the recovery of electricity costs from all categories of consumers, the government has planned higher subsidies for the power sector.
Pertinently, the industrial sector has to pay higher tariffs to help the government give subsidies to domestic consumers.
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