To prevent slippages due to the escalation of the circular debt agreed with the International Monetary Fund (IMF), the Ministry of Power has issued an SOS (Save Our Soul) requesting the release of subsidies up to Rs400 billion by the December end, The News reported.
Out of the Rs1,229 billion in subsidies allotted for the current fiscal year, the Ministry of Finance has only released Rs82 billion thus far. An additional Rs318 billion must be released promptly to meet an indicative objective set under the IMF’s $7 billion Extended Fund Facility (EFF) programme.
If the allocated subsidy amount is not released till December 31, it might result in violating the indicative target agreed with the IMF for amassing the circular debt
In an official letter to the Ministry of Finance, the Ministry of Power requested that the Rs400 billion subsidy be released within the allotted time limit.
Under the Circular Debt Management Plan (CDMP), the government envisaged multi-pronged strategy, including cost recovery, provision of subsidy allocation of Rs1,229 billion for whole financial year 2024-25, and privatising and striking concessional agreements with selected power distribution companies in the first phase. The tariff determination agreed with the IMF could not be implemented with effect from July 2024, so it hiked the cost of subsidy to the tune of Rs125 billion.
