ISLAMABAD: The federal government has further slashed subsidies on energy supplies and also withdrawn the concession on fertiliser sales in the budget for the fiscal year 2016-17.
According to the proposed budget, the subsidy amount has gone up from Rs137.603 billion to Rs140.6 billion, but in relation to the total size of the national economy, it has slipped to 0.4% of gross domestic product (GDP) for the next fiscal year compared to 0.5% in the outgoing year. In 2014-15, the subsidy stood at 0.7% of GDP.
In 2015-16, subsidy payments are estimated to have jumped to Rs196.54 billion from the target of Rs137.6 billion, courtesy support extended to power companies and K-Electric.
According to the budget documents, Rs95.4 billion has been set aside for subsidising the power industry, excluding K-Electric. Of this, Rs60 billion will cover tariff differential claims of the power distribution companies and Rs8 billion will be utilised to pick up receivables from the Federally Administered Tribal Areas (Fata) against Rs6 billion this year.
