In the proposed budget for the fiscal year 2013-14, the newly elected Pakistan Muslim League-Nawaz (PML-N) government allocated Rs 240.434 billion for subsidies, which is 35 percent less than the amount earmarked for the purpose in the outgoing fiscal year.

The government has targeted this subsidy at the energy sector since Water and Power Development Authority (WAPDA) and Pakistan Electric Power Company (PEPCO) will get 68.7 percent of the total allocation followed by Karachi Electric Supply Company (KESC), which gets a share of 22.9 percent.

In budget estimates 2012-13, Rs 208.595 billion were proposed for subsidies, however, later in the revised budget, government had to increase subsidies to Rs 367.472 billion.

A total estimate of subsidies for budget 2013-14 is around 0.92 percent of the country’s gross domestic product (GDP).

According to breakup, Rs 165.1 billion has been earmarked for Inter Disco Tarrif Differential, Rs 3,000 million has been proposed for Tariff Differential for agri-tubewell in Balochistan and Rs 12,000 million has been allocated to increase WAPDA receivables from Federally Administered Tribal Areas (FATA).

In addition, Rs 100 million has been allocated for Exchange Rate Differential for USAID’s grant to power generation companies.

Similarly, a total of Rs 55,000 million has been allocated for KESC, while Rs 6,000 million has been allocated for Utility Store Corporation (USC). USC will spend Rs 2,000 million on the ‘Ramzan Package’ and Rs 4,000 million for the sale of sugar.

According to budgetary documents, Rs 9,000 million has been allocated for Pakistan Agricultural Storage and Services Corporation (PASSCO).

Of the 9,000 million, Rs 4,000 million would be spent on cost differential for sale of wheat while Rs 5,000 million for reserved wheat stock.

The budgetary document further stated that for the next fiscal year, an amount of Rs 4,000 million had been allocated for oil refineries and oil marketing companies, Rs 231 million for Fauji Fertilizer Bin Qasim Ltd, Rs 283 million for sale of wheat in FATA, Rs 815 million for sale of wheat in Gilgit-Balitistan and Rs 5 million has been fixed for sale of salt in Gilgit-Baltistan.