ISLAMABAD: The federal government has budgeted a decline in subsidies by 54 percent - from the revised figure for the current year of Rs 1.5149 trillion to Rs 699 billion for 2022-23.
However, the budgeted amount for next year reflects an increase of 2.5 percent when compared to the budgeted amount of Rs 682 billion for 2021-22. Power sector subsidies have been slashed by 4.1 per cent to 490 billion for FY 2022-23 from Rs 511 billion earmarked in budget 2021-22 but reflect a decline of over 50 per cent when compared with Rs 989 billion in the revised figures of 2021-22.
For Inter-Discos tariff differential, an amount of Rs 225 billion has been earmarked in the budget 2022-23 against allocations of Rs 184 billion for FY 2021-22 which is 21.6 per cent higher compared to outgoing fiscal year.
The government has earmarked Rs 180 billion for payment to IPPs in 2022-23 as compared to Rs 136 billion in the outgoing fiscal year, Rs 35 billion for PHL against allocation of Rs 118 billion in budget 2021-22, which is over 70 per cent less than original estimates. No amount has been earmarked for tariff differential for agri- tube wells in Balochistan, Pepco receivables ex-FATA and Tariff Differential Subsidy (TDS) PM package.
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According to budget documents, the government has earmarked Rs 3 billion for AJ&K TDS, Rs 7 billion for industrial support package and Rs 20 billion for zero rated industry.
For K-Electric, the government has earmarked Rs 80 billion for FY 2022-23 which is about 6 per cent less than Rs 85 billion earmarked for FY 2021-22. Of this, Rs 60 billion is for TDS, Rs 7 billion will be for tariff differential for agriculture tube wells in Balochistan and Rs 13 billion for ISP.
The government has earmarked Rs 71 billion as subsidy for petroleum, Rs 40 billion to LNG sector for providing gas at lower rate to industry, Rs 6 billion for PSO, APL and others liabilities, Rs 25 billion to domestic consumers whereas no amount has been set aside for PDC claims (28 February PM package).
For Passco, Rs 7 billion has earmarked for subsidy on account of wheat operations and wheat reserved stocks. The government has earmarked Rs 17 billion for USC in 2022-23, which is Rs 183 per cent higher than Rs 6 billion, of which Rs 5 billion will be for Ramazan package and Rs 12 billion as PM package.
Other budgeted subsidies are as follows: (i) wheat subsidy to GB Rs 8 billion;(ii) Metro Bus, Rs 4 billion; (iii)Naya Pakistan Housing Authority, Rs 500 million; (iv) mark-up subsidy Naya Pakistan, Rs 500 million; and (v) subsidy on import of urea Rs 6 billion.
Copyright Business Recorder, 2022
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