Budget 2018-19: Govt estimates Rs147,746mn for subsidies on power, textile, water

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ISLAMABAD: The government has estimated Rs147,604 million worth subsidies for power, food, textile, water, construction of small dams during the financial year 2018-19.

According to budgetary documents, total subsidies for the fiscal year 2018-19 have been estimated at Rs174,746 million, which increased by 25.9 per cent, and 18.4 per cent over the budget and revised estimates of 2017-18.

In budget 2018-19, the allocation for subsidies to WAPDA/PEPCO forms the major component, which is 76.7 per cent of the total allocation, followed by subsidy to PASSCO with a share of 10.9 per cent and KESC with a share of 8.8 per cent. A total estimate of subsidies for the budget 2018-19 is 0.5 per cent of the Gross Domestic Product (GDP).

As per documents, a total of Rs134,000 million in subsidy has been estimated for FY2018-19, while subsidy to KESC is to stand at Rs15,400 million, and Rs6,000 million worth subsidy for Utility Store Corporation (USC), Rs1,000 million subsidy for PASSCO and Rs500 million subsidy has been estimated for the National Food Security and Research (NFS&R) division. Similarly, a subsidy to others (sale of wheat in FATA) is also estimated to stand at Rs300 million during FY 2018-19.

It is worth mentioning that in order to alleviate the impact of inflation on citizens, especially the poor segments of society, the federal government spends a fairly large sum on providing power and food subsidies.

In the budget estimates 2017-18, subsidies were Rs138,846 million; in revised estimates 2017-18 they increased to Rs147,604 million due to an increase in subsidy to KESC (for DISCOs and K-Electric), as well as the subsidy for fertilizers.