Pakistan's economy grapples with over Rs6tr power sector subsidies in 15 years
Business
Pakistan's economy grapples with over Rs6tr power sector subsidies in 15 years
LAHORE (Dunya Investigation Cell) – A recent investigation conducted by the Dunya Investigation Cell has revealed that Pakistan’s economy has borne the brunt of substantial subsidies over the past two decades, with power sector alone facing a challenge of a staggering Rs905 billion shortfall during the upcoming fiscal year 2024.
The investigation uncovered successive governments, instead of reforming the power sector, squandered a colossal sum of Rs6,196 billion between 2008 and 2023 in the form of subsidies. Document from the Finance Department indicated that during the last 15 financial years, the power sector received a total subsidy of Rs6 trillion.
The breakdown of the subsidies is given below:
Wapda: Rs3.59 trillion
Karachi Electricity Company: Rs1.114 trillion
Private Power Plant Companies: Rs756 billion
Party wise subsidies allocation:
Pakistan Peoples Party (PPP): Rs1.581 trillion
Wapda was given Rs1.333 trillion
KESC was given Rs247.79 billion
Pakistan Muslim League Nawaz (PML-N): Rs934.598 billion
Wapda was given Rs731.98
KSCE: Rs 202 billion
Pakistan Tehreek-e-Insaf (PTI): Rs1.905 trillion
Wapda was given Rs1.142 trillion
KSCE was given Rs165.4 billion
Private Power Plan Companies were given Rs598 billion
During the PTI’s four-year term, a record breaking subsidy of Rs1.905 trillion were spent on the power sector. The subsidy increased by a remarkable 365 percent, with the highest amount given in a single year, Rs1.072 trillion in fiscal year 2022.
When we conduct a comparative analysis between PTI, PML-N and PPP, the PTI paid Rs970.6 billion more than the PPP in power sector subsidies.
The coalition government’s impact was also considerable as the Pakistan Democratic Movement (PDM), in power since April 2022, paid Rs870 billion as subsidy for power sector during 2023, making the highest subsidy in the last 15 fiscal years.
The current fiscal year 2024 is anticipated to witness a record power sector subsidy of Rs905 billion, challenging the economic stability of the country.
The investigation highlights the dire financial situation in the power sector and emphasises the need for comprehensive reform measures to ensure sustainable economic growth.
