Subsidies for railways, power sector to swell allocation

ISLAMABAD: It will be first time in Pakistan’s budget history that the proposed subsidy of Rs 30 billion for Pakistan Railways to meet losses, as well as higher subsidy for the poorly performing power sector would increase the overall allocation on subsidies for 2018-19.

According to official sources, power sector’s subsidy is proposed at around Rs 189 billion of which Rs 135 billion will be allocated for Tariff Differential Subsidy (TDS) for power Distribution Companies (Discos) including Rs 6 billion of GoP equity in Discos through PHPL for payment of DSL of STFF whereas K-Electric will get Rs 15 billion on this account. In 2017-18, a subsidy of Rs 65 billion was allocated for Discos as TDS and Rs 15.5 billion for K-Electric.

The government will also earmark Rs 12 billion for tariff differential for agriculture tube wells in Balochistan in 2018-19 against Rs 8.5 billion allocated for 2017-18. To pick up power sector’s receivables against FATA, the government will earmark Rs 14 billion against Rs 10 billion allocated in 2017-18. The government has also agreed to allocate Rs 12.8 billion to clear a portion of arrears of around Rs 70 billion.

Published in Business Recorder, 18th April, 2018