ISLAMABAD: The Government of Punjab is reportedly at odds with Islamabad over financial issues, resulting in additional fiscal pressures for the province.
In a letter, this concern was conveyed by Punjab’s Finance Minister, Mian Mujtaba Shuja-ur-Rehman, to Federal Minister for Power, Sardar Awais Ahmad Khan Leghari, on September 23, 2025. The letter was titled “Recovery of Outstanding Amount from the Government of Punjab.”
The Provincial Finance Minister referred to the earlier communication of the Power Minister of December 10, 2024, in which the Federal Government claimed Rs. 38.014 billion in outstanding electricity dues payable by various departments of the Punjab Government up to September 2024. However, according to Punjab, its verified and reconciled liability stands at only Rs. 14.957 billion as of June 2024.
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This figure was confirmed by the Reconciliation Cell of the Punjab Energy Department after several meetings with representatives of the concerned DISCOs and Punjab Government departments.
According to the Government of Punjab, the Federal Government has made 25 percent at-source deductions, totalling Rs. 18.142 billion during the fiscal year 2024–25 alone, from federal transfers to Punjab instead of power sector payables. This brings cumulative deductions to Rs. 33 billion as of September 23, 2205.
Despite these deductions, Punjab claims that significant liabilities owed by the Federal Government to the province remain unresolved. Repeated reminders have reportedly failed to produce any meaningful progress.
“This situation has created an imbalance where the Federal Government deducts its claims without adequately addressing its own financial obligations toward Punjab,” the letter states. “The resultant imbalance adds to the fiscal pressures already being managed by the province.”
Furthermore, under Article 157(2)(b) of the Constitution of the Islamic Republic of Pakistan (1973), Electricity Duty payable to the Punjab Government has been duly reconciled by the Energy Department with DISCOs up to June 2024. An amount of Rs. 31.93 billion remains receivable from the Federal Government in this regard.
“Instead of transferring the Electricity Duty into the relevant receipt accounts of Punjab, the DISCOs in Punjab have persistently retained the collected amount and unilaterally adjusted it—either against the outstanding dues of Punjab Government connections or against the GST subsidy for private agricultural tube well consumers in Punjab,” the Provincial Finance Minister stated.
After outlining the financial dispute, the Finance Minister proposed a holistic reconciliation of all electricity dues and receivables related to Electricity Duty. This, he said, would help determine the actual magnitude of payables and receivables between the Federal and Punjab Governments.
“It is hoped that through joint efforts and by adopting a transparent framework for addressing liabilities and receivables, we can ensure a more efficient mechanism that supports our shared goals and objectives,” he added.
The Federal Power Minister, in a separate letter addressed to provincial Chief Ministers, had earlier requested the discontinuation of Electricity Duty collection from electricity consumers, aiming to reduce the tariff. However, the Punjab Government did not agree to this proposal.
Copyright Business Recorder, 2025