ECC extends power subsidies

The government on Monday approved Rs68 billion in electricity and gas subsidies for a class of exporters and Karachi’s industrial consumers but pended a decision about similar subsidies for farmers, as political commitments far exceed narrowing fiscal space.

The Economic Coordination Committee (ECC) of the cabinet approved the Rs68 billion subsidies for five export-oriented sectors and incremental use of electricity by industrial consumers of Karachi. But the cabinet body did not take two other decisions that would have cost the government another Rs74 billion on account of agriculture tube well subsidies (Rs48 billion) and time of use meters industrial consumers (Rs26 billion).

Against Rs68 billion subsidies, the available budget was only Rs49 billion and the rest of the Rs23 billion will be provided in supplementary budget, which means without seeking prior approval of the parliament. Finance Minister Shaukat Tarin presided over the ECC meeting.

“Full subsidy will be provided through supplementary grant, but, when it is earned,” said Tarin while responding to a question by The Express Tribune.