Subsidy for lifeline power consumers: Rs 8.1 billion allocated, National Assembly told

The government said on Friday that Rs 8 1 billion has been allocated for providing subsidy to power sector on account of tariff differential during the current fiscal year. The Minister for Finance in a written reply informed the House that this subsidy would be paid to meet the tariff differential, the difference of electricity tariff determined by Nepra and that notified by Ministry of Water and Power.
The subsidy is meant to provide relief to consumers on electricity bills. Specifically, 4.2 million lifeline consumers (consuming up to 50 units per month) are being charged at the rate of Rs 1.87 per unit, whereas Average Determined Tariff is Rs 9.57 per unit. A committee constituted by the government completed its deliberations with various stakeholders to review the existing tariff regime in power sector and make recommendations to rationalise subsidy and eliminate circular debt.
The Finance Minister said that the government is providing subsidy on food items for the poor population through Utility Stores Corporation (USC). Network of Utility Stores Corporation outlets is mostly situated in the low income locations. Therefore, low income population is the main beneficiary of this window as Rs 2 billion has been allocated in the current budget for Ramazan Package. Rs 4 billion have been allocated in current budget for TCP to import sugar in order to avoid shortage and price hike of this item in the market.
The government has allocated Rs 12 billion in the current financial year budget (2011-12) as subsidy to the TCP for imported urea to bring its price at par with locally manufactured urea price. As subsistence farmers form 88 percent of total population of farmers. Therefore, they will benefit from this subsidy. The subsidy on urea as input for agriculture products will consequently help in making the price of food items stable.
The government has been providing subsidy to Pakistan Railways to meet their operational losses mainly caused by lower passenger fare and running passenger trains on the un-economical routes. This subsidy is meant to provide the affordable travelling facility to the common population of the country. The government has provided subsidy of Rs 25 billion in the current financial year budget for the purpose.