ISLAMABAD - The government has cut the amount of subsidies by Rs 37 billion in the budget for fiscal year 2014-15.

The government had allocated Rs 240.434 billion for subsidies last year and this year it has proposed Rs 203.248 billion to be allocated under the head of subsidies with special focus on power sector.

Despite immense pressure from the International Monetary Fund to reduce budgetary deficit, the government had revised the subsidy amount last year and after revision the government paid a total of Rs 323 billion for subsidies during the fiscal year 2013-14.

In the budget for the fiscal year 2014-15, the government has proposed a sum of Rs 156 billion under the head of subsidy for the power sector. Last year the government had allocated Rs 165 billion on the power sector subsidies but it actually spent Rs 245 billion on subsidies for power sector.

As per details of power sector subsidies proposed by the government, it has suggested Rs 150 billion for Inter-Disco Tariff Differential, Rs 1 billion for agri tube wells in Balochistan and Rs 5 billion for Pepco receivables from Fata.

The government has allocated Rs 29 billion subsidy for the Karachi Electric Supply Company. KESC is a company which shows around 38 per line losses. The government had paid Rs 64.3 billion to KESC against the subsidy though it had allocated Rs 55 billion last year for the subsidy to be given to KESC.

This year from the very start the government has been showing its annoyance on the performance of KESC and has cut its subsidy amount.

As far as the Ramazan Package is concerned that is announced every year for the poor of the country, the government has proposed Rs 7 billion to be allocated as subsidy with an increase of Rs 1 billion as it had allocated Rs 6 billion last year for the same purpose.

A sum of Rs 8 billion has been proposed as subsidy for Passco with a decrease of Rs 1 billion as compared to last year. For some other miscellaneous categories, it has proposed Rs 3.148 billion under the head of subsidies.

The miscellaneous include oil refineries, Fauji Fertilizer, sale of wheat in Fata and Gilgit-Baltistan. Last year the government had given no subsidy on sale of wheat in Fata and Gilgit-Baltistan but for the fiscal year 2014-15 it has proposed a sum of Rs 1.1 billion to be allocated for the purpose.