ISLAMABAD: The government on Friday announced it had allocated Rs699 billion in the federal budget 2022-23 for subsidies to provide relief to the people. Around 92 per cent of the allocated amount will be spent on fuel and electricity subsidies, the documents show.

The figure represents a slight increase from the Rs682bn allocated to this head last year.

Finance Minister Miftah Ismail, while unveiling the budget, said Prime Minister Shehbaz Sharif believed that maximum relief should be given to the people during these hard times, especially to those segments who cannot withstand the coming storm of price hikes.

“The government has taken many steps to provide assistance and subsidies for this purpose, but in order to sustain them, we will have to create resources,” he added.

He said taxes were being placed on those earning higher incomes to redirect wealth to the poor. He said taxes need to be imposed both on higher incomes as well as on those articles that are used mostly by affluent people and less by the middle class or poor.

“The rich can thus provide much-needed relief to the poor,” he added. According to the budget documents, subsidies to be given through Wapda/Pepco will amount to Rs275bn; subsidies to be given through K-Electric will account for Rs80bn; subsidies for Power Holding Private Limited & independent power producers will account for Rs215bn, and petroleum subsidies will account for Rs71bn.

In total, fuel and power subsidies will account for Rs641bn of the total Rs699bn set aside for subsidies. Passco will be given Rs7bn and the Utility Stores Corporation will be subsidised with Rs17bn.

Under the ‘others’ head, the government has allocated Rs34bn, which includes a wheat subsidy for Gilgit-Baltistan, which will account for Rs8bn, and another Rs4bn, which will be used to subsidise Metro Bus service.

Published in Dawn, June 11th, 2022