Government Slashes Subsidies by PKR 190 Billion Under IMF Pressure; Ramzan Package, Utility Stores, and Agri Tube Wells Subsidies Eliminated
Islamabad – The government has made a record reduction of PKR 190 billion in the subsidy bill for the upcoming fiscal year, aligning with demands from the International Monetary Fund (IMF). According to budget documents, a total of PKR 1,186 billion has been allocated for subsidies in the new budget.
Subsidies for the Ramzan Relief Package, Utility Stores, and agricultural tube wells have been completely withdrawn. However, an allocation of PKR 9 billion has been proposed for the Electric Vehicle (EV) Scheme.
For the power sector, a major allocation of PKR 1,036 billion has been made, though this represents a reduction of PKR 154 billion compared to the current fiscal year. WAPDA, PEPCO, and K-Electric (KE) will be the primary beneficiaries. KE alone will receive PKR 125 billion to cover tariff differentials.
Subsidies for the industrial and production sector have been reduced to PKR 24 billion from PKR 68 billion. No funds have been allocated for the Ramzan Relief Package or for the Prime Minister’s package via Utility Stores, though PKR 15 billion has been earmarked to settle old dues for sugar supply at Utility Stores.
There will be no subsidies on fertilizer supply, though PKR 7 billion has been allocated for the import of urea. A subsidy of PKR 7.3 billion is proposed for the Islamabad Metro Bus service.
Balochistan’s solar-powered agricultural tube wells have also been excluded from subsidy support, and the Agricultural Development Bank will not receive any markup subsidy on agricultural loans.
However, a PKR 20 billion subsidy has been set aside for wheat supply to Gilgit-Baltistan, and an equal amount will go to the food sector’s PASSCO operations. Additionally, a PKR 7 billion subsidy is planned under the upcoming Kisan (Farmer) Package.
The housing sector is set to receive PKR 10 billion, while PKR 30 billion has been proposed for the State Bank’s refinancing scheme. The petroleum sector will get PKR 1.2 billion in subsidies, and the Small and Medium Enterprise (SME) sector has been allocated PKR 5.4 billion.
