Islamabad - The government has drastically reduced the subsidies by 35 per cent in the budget for the next financial year 2013-2014 that might increase the inflation in the country.

According to the budget documents, the government has proposed a total amount of Rs 240 billion for the subsidies in the budget for fiscal year 2013-14 against Rs 367 billion provided in the previous year.

It is also pertinent to mention here that the last government of Pakistan People’s Party had allocated Rs 208 billion for subsidies in the previous budget but later it was revised and in total Rs 367 billion were provided in the head of subsidy.

The government has proposed a total of Rs 165 billion subsidy for the power sector against Rs 264 billion provided to the sector previous year. The actual amount allocated previous year was Rs 134 billion. For the tariff differential for Agri-Tubewells in Balochistan, an amount of Rs 3 billion has been proposed in the budget 2013-14. Last year previous government had allocated Rs 4 billion for the purpose and the same was given.

The government has proposed Rs 55 billion subsidy to be given Karachi Electric Supply Company against Rs 84 billion given to the company during last fiscal year.

No subsidy has been proposed for the Trading Corporation of Pakistan in the current budget. The subsidy for Utility Stores Corporation has been proposed the same as last year and an amount of Rs 6 billion has been suggested for the purpose. As per details, Rs 2 billion has been suggested for Ramzan package and Rs 4 billion subsidy has been proposed under the head of sale of sugar.

Subsidy for PASCO whereas has been increased in the current budget and an amount of Rs 9 billion has been proposed to be provided to the department against Rs 6 billion provided last year.

Subsidy for other miscellaneous departments have been decreased to Rs 5.3 billion against Rs 12 billion provided last year.