The government, in the federal budget for 2005-06, has set Rs 72.339 billion as subsidies for public sector power utilities, Passco, and Trading Corporation of Pakistan (TCP). This figure is 22 percent higher than current fiscal year''''s budget estimates of Rs 59.532 billion and 44 percent higher than revised estimates of Rs 51.456 billion. The two power sector entities--Water and Power Development Authority (Wapda) and Karachi Electric Supply Corporation (KESC)--would get a subsidy of Rs 53.5 billion.
Out of this amount, Wapda would get: Rs 16.213 billion as adjustment of additional surcharge; Rs 1.4 billion on account of AJK arrears; Rs 2.6 billion for Wapda tubewells in Balochistan; Rs 995 million on account of tariff discount; Rs 2.764 billion as Wapda ad hoc and Rs 21 billion as inter Discos tariff differential.
KESC would get Rs 2.420 billion as general sales tax (GST), Rs 41 million for differential agri tubewells in Balochistan, Rs 1.012 billion on account of tariff discount. The government had not allocated any amount for this purpose in 2004-05 budget, but gave Rs 925 million in revised estimates. However, no amount has been allocated for cash shortfall for 2005-06, while Rs 6.482 billion had been provided in previous budget.
According to the budget documents, Rs 957 million subsidy has been earmarked for Passco for export of wheat, and Rs 8.3 billion to Trading Corporation of Pakistan (TCP) on account of imported fertilizer and wheat. During the outgoing year, the government had granted Rs 4 billion subsidy on fertilizer import.
FFC Jordan would also get Rs 1.010 billion subsidy. An amount of Rs 80 million has also been allocated for servicing and repayment of loan installments for Ghulam Ishaq Khan (GIK) Institute, Rs 329 million as sales of wheat in Fata and Rs 294 million on account of sale of wheat, salt and sugar to Gilgit.
Moreover, the government has claimed in the budget document that it would also provide subsidy to the consumers by not passing on the full impact of increase in international oil prices.