Govt allocates Rs 1363.412 billion for subsidies in FY 2024-25

ISLAMABAD: The federal government has allocated Rs 1363.412 billion for subsidies under various heads for the upcoming fiscal year 2024-25, marking a 27.3 percent increase compared to the Rs 1071 billion revised allocations for the outgoing financial year 2023-24.

According to budget documents, a significant portion of the subsidy allocation, Rs 1190 billion, has been earmarked for the power sector in FY 2024-25. This is nearly double the Rs 584 billion allocated in the outgoing fiscal year. The breakdown for the power sector subsidies includes Rs 276 billion for inter-disco tariff differentials, Rs 108 billion for tariff differentials to AJK, Rs 174 billion for tariff differentials to K-Electric, Rs 48 billion for PEPCO, and Rs 65 billion for subsidies to the merged districts of KP, formerly FATA.

Additionally, the power sector subsidy includes a lump sum provision of Rs 509 billion under various heads such as GPPS Equity, electric revenue shortfall of AJK, TDS KE arrears, FATA subsidy arrears, and additional subsidies for the next fiscal year.

The government has also allocated Rs 18.400 billion as petroleum subsidies, which cover the shortfall in guaranteed throughput of PEPCO, payments of shortfalls to Asia Petroleum, and subsidies to domestic consumers through SNGPL.

In the next budget, Rs 12 billion have been allocated for subsidies to PASSCO for maintaining wheat reserve stocks and covering the cost differential for wheat sales. For industries and production, Rs 68 billion have been allocated under subsidies for the production and supply of urea fertilizer and the Utility Stores Corporation (USC). The proposed subsidy for USC includes a Rs 10 billion Ramzan package, a Rs 50 billion PM package and arrears, and Rs 5 billion for sugar subsidy arrears.

Other subsidies amounting to Rs 75.01 billion include Rs 15.872 billion for wheat subsidy to GB, Rs 10 billion for the import of urea, Rs 1 billion for the Naya Pakistan Housing Authority, Rs 21 billion for the Mera Pakistan Mera Ghar Scheme (mark-up), Rs 13.86 billion for mark-up subsidies to support the phasing out of SBP’s refinancing facilities, Rs 3 billion for metro bus subsidies, and Rs 5 billion for the mark-up subsidy of the Kissan package.

Ghulam Abbas
Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]

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