The federal government has decided to end the current
subsidy system for electricity consumers.
According to sources in the Ministry of Finance,
preparations are underway to abolish the current system of power subsidy and
implement a new targeted subsidy system from January 2027. Under the new
mechanism, electricity subsidy will be provided under the Benazir Income
Support Program. Only eligible individuals will be identified for subsidy based
on BISP data.
An agreement has been reached between the government and the
IMF to change the subsidy mechanism. A written assurance has been given to the
IMF on subsidy-related reforms in the power sector. The change in the new
mechanism will eliminate the tariff differential and cross-subsidy system.
According to sources, the move will prevent the use of
multiple meters to display fewer units, work will begin on linking electricity
consumers to the National Socio-Economic Registry, a new system for verifying
eligible consumers will be introduced with the support of the World Bank, and
it has been decided to hire the services of an external firm for power subsidy
payment this month.
Sources say that under the reforms, the government will also
take steps to change the irrigation system. For reforms in the irrigation
system, the e-Abiyana system will be implemented across the country.
According to sources in the Ministry of Finance, the digital
e-Abiyana system will also be implemented in Sindh, Khyber Pakhtunkhwa and
Balochistan. The e-Bayaniya system has already been implemented in Punjab, and
will now be implemented in the remaining provinces.
It should be remembered that an important meeting of the IMF
Executive Board will be held tomorrow for the 1.2 billion dollar loan
installment.
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