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Subsidy Allocation Increased to Rs 682 Billion

Islamabad: The government has boosted the amount of subsidies by 58% to Rs 682 billion in the federal budget for the upcoming fiscal year 2021-22, commencing in July. The power sector will receive the largest portion of this increase.

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With the subsidy allocation for FY22, the government plans to provide a cushion for energy, metro bus, wheat operations and stockpiles, fertiliser plants, the Naya Pakistan Housing Authority, and the Ramadan package consumers.

However, it is uncertain if the government will be able to stay within the subsidy ceiling or exceed the objective, as it did in the previous fiscal year.

During the current fiscal year, the subsidy for Water and Power Development Authority (Wapda) due to pricing disparity in Azad Jammu and Kashmir (AJK) increased from Rs 1 billion to Rs 27 billion.

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The subsidy for Wapda/Pepco receivables in amalgamated districts of Khyber-Pakhtunkhwa (K-P) increased from Rs 10 billion to Rs 15 billion.

In comparison, the subsidy allocation for the petroleum sector was 10 billion rupees in FY21 and was later increased to 12 billion rupees.

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