ISLAMABAD - The federal and four provincial governments massively slashed the subsidies by over 35 percent in last fiscal year 2017-18.

The federal and provincials governments of the country had paid Rs260 billion as subsidies during the year 2017-18 as against Rs403 billion in preceding year showing reduction of over 35 percent. Pakistan’s budget deficit had ballooned to highest ever level of Rs2.26 trillion during last fiscal year despite slashing the subsidies massively. The reduction in subsidies had not controlled the expenditures, which had recorded at Rs7.49 trillion (21.8 percent of the GDP) during last fiscal year.

Spending on subsidies, health, education, law and order, construction of roads, rural development, low cost housing and other sectors are part of the Poverty Reduction Strategy Programme (PRSP) expenditures. The PRSP initiative was launched in 2000 with close collaboration of international lending agencies aimed at improving and monitoring pro-poor spending in Pakistan. The spending of federal and provincial governments on Poverty Reduction Strategy Programme (PRSP) had increased in the previous year.

Overall spending of govts increased by 18.6pc to Rs829.2b

According to data of ministry of finance, the cash stipend given to the poorer segment of the society had also gone down by over 7 percent. An amount of Rs99 billion was spent under the Benazir Income Support Programme (BISP) during previous year from Rs107 billion of the preceding year. Similarly, amount spent on Prime Minister Global SDGs Achievement programme had also reduced to Rs32.6 billion in 2017-18 from Rs42.5 billion of the year 2016-17. 


Overall spending of federal and provincial governments had recorded at Rs829.2 billion during 2017-18, which is 18.6 percent higher than the spending of previous year. However, a major portion of education budget Rs721.9 billion was spent on the current expenditures including payment of salaries.

The spending of federal government had increased to Rs126.9 billion in 2017-18 as against Rs108 billion of the corresponding period of last year, registering an increase of 17.5 percent. Punjab’s spending on education had enhanced to Rs340.8 billion in 2017-18 from Rs260.6 billion of a year ago.  The spending of Sindh on education had recorded an increase of 13.7 percent and consumed Rs166 billion during the last fiscal year. The Khyber Pakhtunkhawa (KP)’s government spending on education sector had enhanced to Rs142 billion during the financial year 2017-18 from Rs136 billion.

The Balochistan government had spent Rs52.8 billion on education during 2017-18 from Rs47.7 billion of a year ago showing increase of 10.6 percent.


Health spending came in at Rs416.5 billion in 2017018, an increase of Rs97.6 billion or 29.6 percent from the preceding year. Out of this, Rs329 billion was on account of current expenditures, mostly for salaries and transportation.


The federal government’s spending on health has dropped by 25.6 percent, as it had released Rs34.8 billion during FY2018 as compared to Rs46.9 billion of the same period of a year ago. However, the Punjab government’s spending on health had increased to Rs218.9 billion in last financial year from Rs148.8 billion of a year ago.  Similarly, the Sindh’s government spending on education had also enhanced to Rs83.7 billion during FY2018 from Rs64 billion. The KP’s government spending has also increased to Rs57.5 billion during FY2018 as against Rs47.8 billion of the corresponding months of previous year. The Balochistan government had spent Rs21.5 billion on health.

Law and Order

The government spent Rs390.6 billion on maintaining law and order, up by Rs34.4 billion or 9.7 percent from the last year. Almost the entire amount, Rs379.6 billion, was spent on running expenses. The increase was across the board.

Other Sectors

On the administration of justice, the combined spending of federal and provincial governments had increased to Rs53.5 billion during FY2018 from Rs41.9 billion of a year ago. The spending on agriculture went up by 7.5 percent to Rs277.9 billion. Similarly, expenses on building highways fell by 14 percent to Rs452.5 billion in the last fiscal year.