ISLAMABAD -  The federal government has drastically reduced the subsidies amount by 13.4 percent during first nine months (July-March) of the ongoing financial year on the pressure of international monetary fund (IMF).

The federal government had cut the subsidy amount by 13.4 percent to Rs107.8 billion during nine months of the current fiscal year from Rs124.5 billion of the corresponding period of the previous year. According to the documents of the Ministry of Finance, the Sindh government has slashed the subsidy amount by 65.5 percent to Rs5.5 billion during July-March 2016-17 from Rs9.1 billion of the same months of the last year.

However, other three provinces including Punjab, Khyber Pakhtunkhawa and Balochistan had enhanced the subsidy amount. The Punjab government had enhanced the subsidy amount to Rs25.1 billion during period under review from Rs22.2 billion of the last year. The Khyber Pakhtunkhawa government also increased the subsidy to Rs5.3 billion from Rs3.5 billion. Similarly, the Balochistan government had enhanced the subsidy to Rs2.3 billion from Rs748 million.

The overall subsidy given by federal and four provincial governments had come down to Rs146.08 billion during July-March of the year 2016-17 from Rs160.07 billion of the same period of last year reflecting a decline of 8.7 percent.

Subsidy is part of the Annual Poverty Reduction Strategy Paper (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.

According to the PRSP summary for July-March of 2016-17, poverty reduction expenditures by the federal and four provincial governments stood at Rs1681.7 billion, which were just Rs134.3 billion higher than the previous year’s spending.

The combined federal and provincial spending on education in the first quarter of the current financial year remained at Rs477.5 billion - higher by Rs27.8 billion or 6.1pc over the previous fiscal year. Out of the total spending, 87pc of the budget was spent on account of current education expenditures like salaries and other expenditures.

On health, the combined spending increased to Rs181.2 billion - up from Rs20 billion. About three-fourths of the total spending was on account of current expenditures.

The combined spending on social security and welfare also dropped by 23pc to Rs3.1 billion. The spending on natural calamities and other disasters contracted 81pc to just Rs2.4 billion. According to the latest PRSP figures, spending on improving law and order enhanced to Rs43.9 billion from Rs15.08 billion. The spending on low cost housing had decreased to Rs240 million during July-March of the FY2016 from Rs246 million of the same period last year. The federal government spent Rs221 million and Punjab government spent Rs19 million low cost housing. However, Sindh, Khyber Pakhunkhawa and Balochistan government had not spent a single penny on housing projects.

The federal and provincial governments have spent Rs225.16 billion on improving law and order situation of the country during July-March period of 2016-17 as against Rs203.64 billion of the corresponding period last year showing an increase of 10.57 percent in one year. The government’s spending on natural calamities and other diseases had reduced to Rs20.9 billion from Rs37.4 billion.