Finance Ministry has decided to release only Rs 5 billion to the power sector subsequent to the directives of caretaker Prime Minister Mir Hazar Khan Khoso to immediately release Rs 22.5 billion, it was learnt. Sources revealed that a meeting was held between Advisor to Prime Minister on Finance Dr Shahid Amjad Chaudhary and Secretary Finance Dr Waqar Masood subsequent to the directive of caretaker Prime Minister.
They said the meeting decided to release only Rs 5 billion to Ministry of Water and Power; and has not taken any decision on the release of the remaining amount due to severe fiscal constraints. In reply to a question about fiscal space, they said that a subsidy to the power sector has already exceeded the revised budgetary allocations and additional releases would further widen the budget deficit.
A senior official requesting anonymity said that Finance Ministry had given a number of briefings to the caretaker Prime Minister and his cabinet about the overall economic situation especially with respect to a massive shortfall in revenue collection. They said that with the release of Rs 5 billion, the total subsidy to the power sector on account of tariff differential and other accounts would reach Rs 320 billion against Rs 291 billion upward revised allocation from budgetary allocation of Rs 184 billion.
Another official on condition of anonymity said the government borrowing from the banking system is likely to be significantly higher in the current fiscal year due to a big shortfall in revenue collection and massive financial injection to the power sector. The financial crisis of the power sector would persist as long as issues of recovery were not addressed by the Ministry of Water and Power.
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