PTI govt to end subsidies worth billions

ISLAMABAD: The Pakistan Tehreek Insaf (PTI) government has decided to end subsidies worth billions of rupees during this year. 

Sources privy to the development told Profit that the economic team has finalised recommendations to end subsidies for the power, gas and agriculture sectors whereas the government will now extend a subsidy to poor people through the Benazir Income Support Programme (BISP). 

Sources said that the government will make the announcement in this regard sometime in December this year due to the reinstating of the stalled International Monetary Fund (IMF) programme. 

The PTI government had earlier announced Rs288bn subsidies during the current fiscal year (FY) budget and ended around Rs70bn incentives comparable to FY2019-20.

According to the details, a Rs189billion subsidy was given to power departments, Rs16billion subsidy in LNG exports, Rs6bn subsidy to fertiliser plants, Rs6bn subsidy for PSO-exchange losses, Rs26bn for food, Rs30bn to Naya Pakistan Housing Scheme, Rs5bn for coronavirus related programmes and Rs10bn for various other sectors. 

The government had also announced a targeted subsidy during the current fiscal year’s budget after which the incumbent SAPM on Revenue Dr Waqar Masood was given the task to work on the issue. 

Sources said that the government will, however, cotinue subsidies for utility stores, housing, and food security besides giving more money to the poor under the PM’s Ehsaas programme. 

Further, the economic team will also announce tax relief measures for sectors that were affected most during the Covid-19 pandemic lockdowns.

It is pertinent to note that the IMF has asked Pakistan to raise electricity as well as gas tariffs due to the reinstatement of the $6billion stalled programme.

The government is in immense pressure owing to rising inflation due to which the cabinet had deferred the ECC recommendation with regard to increases in electricity and gas tariff.