ISLAMABAD, June 6: The federal government will extend Rs72.3 billion subsidies in 2005-06 to public sector corporations led by Wapda and Karachi Electric Supply Corporation, which is 41 per cent higher than Rs51.4 billion revised estimates for the current fiscal year, reveals budget in brief 2005-06.

In the past, the government was bound under the IMF programme to contain subsidies. Since Pakistan has come out of strict conditionalities of the IMF programme, the subsidies have once again been increased from Rs51.4 billion to Rs72.3 billion.

However, the government has succeeded in saving Rs19.6 billion it has allocated as subsidy to Wapda during the current year by not notifying tariff determinations given by the National Electric Power Regulatory Authority (Nepra) during the current fiscal year.

Of these, the highest share of Rs45 billion subsidies will go to Wapda under different heads. The subsidies to Wapda have increased by over 100 per cent to Rs22 billion revised estimates. These include Rs16 billion for adjustment of additional surcharge, Rs21 billion on account of tariff differential for various distribution companies of Wapda, and Rs2.6 billion for tube wells in Balochistan. During the current year, the subsidies to Wapda stood at Rs22 billion.

About Rs9.6 billion subsidies would be provided to KESC under various heads. These include Rs5 billion on account of tariff differential, Rs1 billion for KESC’s cash shortfall and Rs1.1 billion for its ad hoc tariff. During the current year, the federal government provided Rs9.7 billion subsidies to KESC.

The Pakistan Agricultural Storage and Supplies Corporation (Passco) would be provided Rs957 million in 2005-06 as compared to Rs1.3 billion subsidy in the current fiscal year.

Fauji Foundation Company Jordan will be provided Rs1.01 billion during 2005-06. The company received Rs1.025 billion during the current year.

Oil refineries and oil marketing companies will be given Rs6 billion subsidies during the next fiscal year against Rs11.87 billion during the current fiscal year.

The Trading Corporation of Pakistan will get a total of Rs8.9 billion subsidy in 2005-06 as against Rs4.6 billion revised estimates for the current fiscal year. The next year’s subsidy will include Rs5 billion on account of fertilizer import, Rs3.3 billion for wheat import and Rs600 million on account of sugar export.