Budget 2018-19: Rs 219 billion subsidy on the cards

The government is likely to allocate Rs 219 billion subsidy for next fiscal year with Rs 119.400 billion earmarked for power sector, reliable sources in the Finance Ministry told Business Recorder. Finance Ministry has reportedly proposed a ceiling for allocation of subsidies to various sectors for next fiscal (2018-19) year as follows: Rs 119.400 billion for power sector, Rs 1 billion to Utility Stores Corporation (USC) for sale of pulses at subsidized rates, Rs 3 billion subsidy to USC for sale of sugar (arrears), Rs 1.5 billion subsidy for cost differential for sale of wheat.
Finance Ministry has also proposed the allocation of Rs 500 million for re-imbursement of subsidy to PASSCO on account of paddy operation, another Rs 500 million for reimbursement to PASSCO on account of donation of wheat by the government and Rs 5 billion for wheat reserves stock. Subsidy to PASSCO on account of wheat supplied to Gilgit Baltistan (GB) (arrears) has been proposed at Rs 8.045 billion for next fiscal year, Rs 2 billion for export of sugar, and Rs 1.5 billion for wheat/flour export. A subsidy of Rs 30 billion has been proposed for Pakistan Railways to meet losses.
Finance Ministry, sources added, has proposed a subsidy ceiling of Rs 6 billion for government equity in DISCOs through Power Holding Pakistan Limited (PHPL) for payment to DSL of STFF. Other loans and advances by the federal government include: (i) Rs 40 million interest free loans to Water and Power Development Authority (WAPDA) for operation and maintenance of Hub and Khanpur Dam; (ii) Rs 4 billion loan to Pakistan Steel Mills (PSM), and (iii) a loan of Rs 20 million to State Engineering Corporation.
Sources in the Finance Ministry also told Business Recorder that allocation of Rs 5 billion has been proposed in budget for the next fiscal year for Gas Infrastructure Development Cess under development expenditure of Finance Division. Finance Ministry has also proposed Rs 5 billion as subsidy to Trading Corporation of Pakistan for import of urea fertilizer, Rs 6 billion for Strategic Trade Policy initiatives, and Rs 6 billion for textile policy initiative 2009-14.
The government is also expected to allocate Rs 10 billion for Duty Drawback of Taxes Order 2016-17 and Rs 4 billion for Drawback of Local Taxes and Levies (Non-Textile Order 2017).