Ishaq Dar announces ‘all-inclusive’ power subsidy for export industries
Ishaq Dar, Pakistan’s finance minister, announced on Thursday a power subsidy programme for the country’s export-oriented companies, with an electricity cost per unit set at Rs19.99.
He described the demand for energy subsidies as “just” in a media interview following talks with the Pakistan Textile Exporters Association (PTEA) in Islamabad, and he pledged that the government will pay the discrepancy between the new fixed price and the actual per-unit production cost.
“I expect that industries will now increase Pakistan’s exports,” he said.
Dar added that the “all-inclusive” plan was announced for the five major exporting industries, not just the textile sector, and that the yearly cost of the subsidy would be in the range of Rs90-100 billion.
He assured that “all will be taken care of” and disputed that the subsidies would have any effect on the overall budget or primary deficit.
When asked if the International Monetary Fund (IMF) had been given the package its blessing, the finance minister responded, I don’t need to take [the IMF] into confidence […] when I know what I am doing then it is my responsibility to create [fiscal] space for it and I have done so.”
Dar stated that he had a source of funding for the package and that he believed in making “prudent decisions.” When discussions with the IMF mission are held and they arrive on October 25 “[I will explain it myself],” he continued.
The minister was reportedly planning a significant package of energy subsidies for the textile industry to help it compete with neighbouring nations, according to a previous report by Dawn.
Ishaq Dar announces ‘all-inclusive’ power subsidy for export industries
The PTEA met with Miftah Ismail, a former finance minister, three times earlier this year to educate the administration about the country’s rising energy costs, which made textile exports less competitive with other regional countries.
