ISLAMABAD: The government on Friday asked all federal ministries, divisions and civil agencies to drastically cut their expenditures to divert maximum surplus funds to coronavirus-related fiscal requirements and social protection.

Following a meeting on the next year’s budget, the finance ministry also hinted at adopting a plan “on further expenditure squeeze, rationalising all domains of current expenditure including running of civil government, interest payments, subsidies and other related expenditures”.

In this context, the ministry also floated the idea of providing subsidy on electricity bills to poor consumers directly through the BISP (Benazir Income Support Programme) mechanism to ensure its targeted payment to subsistence consumers instead of the current practices that are leading to a continuous increase in size and resulting in misuse. For the next year, it has been estimated that targeted payments will contain power subsidy below Rs200 billion, compared to almost Rs250bn during the current year.

The meeting, presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, also discussed a plan “to divert current expenditure savings to Corona Stimulus financing, under the vision of the prime minister”, said a statement issued after Mr Shaikh met Prime Minister Imran Khan. The ministry said the meeting was called for setting federal spending priorities amid coronavirus-led economic downturn and in the wake of IMF review. Dr Shaikh called for demonstrating a responsible attitude as coronavirus-led impacts were expected to distort economic fabric of the country.

Published in Dawn, May 16th, 2020