The federal government’s financial commitment to State-Owned Enterprises (SOEs) surged to Rs616 billion in the first six months of the last fiscal year, a significant 42% increase compared to the Rs433 billion spent in the same period in the prior year. This substantial outlay, reported by The News on Sunday based on Finance Ministry documents, underscores the heavy burden of sustaining unprofitable public entities, particularly within the power and utility sectors.
According to the finance ministry’s report, the financial assistance provided between July and December 2024 included subsidies, grants, loans, and equity injections. The Rs183 billion increase in financial support highlights the government’s growing commitment. Subsidies, totaling Rs333 billion, saw a 46% year-on-year rise. Grants amounted to Rs113.52 billion, loans to Rs92 billion, and equity support to Rs77.49 billion.
Power distribution companies and public service entities were among the top recipients of subsidies. Key recipients included Multan Electric Power Company (MEPCO) (Rs43.57bn), Islamabad Electric Supply Company (IESCO) (Rs42.14bn), Hyderabad Electric Supply Company (HESCO) (Rs39.59bn), Faisalabad Electric Supply Company (FESCO) (Rs39.89bn), and Pakistan Agricultural Storage and Services Corporation (PASCO) (Rs36.17bn). Other significant subsidy beneficiaries included Quetta Electric Supply Company (QESCO) (Rs32bn), Peshawar Electric Supply Company (PESCO) (Rs27bn), Lahore Electric Supply Company (LESCO) (Rs26bn), Tribal Electric Supply Company (TESCO) (Rs14bn), Gujranwala Electric Power Company (GEPCO) (Rs13bn), and Sukkur Electric Power Company (SEPCO) (Rs11bn). Additionally, subsidies were provided to Pakistan Broadcasting Corporation (Rs3.39bn), Trading Corporation of Pakistan (Rs1.66bn), and Utility Stores Corporation (Rs1.68bn).
Grants were allocated to major national entities, including Power Holding Company (Rs66.56bn), Pakistan Railways (Rs26.60bn), WAPDA (Rs13bn), PTCL (Rs4bn), Gwadar Port Authority (Rs260m), Pakistan Television Corporation (Rs38m), and the National Highway Authority (NHA) (Rs3bn). Loans totaling Rs92 billion were disbursed, including Rs51 billion to the National Transmission and Despatch Company (NTDC) and Rs32.49 billion to NHA. Equity support of Rs77.49 billion was injected into seven state entities, with QESCO receiving the largest share at Rs66 billion.
The report emphasizes the government’s continued fiscal commitment to underperforming public enterprises, despite longstanding pledges of restructuring and reform. Financial analysts caution that this escalating dependence on bailouts, particularly in the power sector plagued by inefficiencies and circular debt, risks diverting crucial funds away from development and welfare initiatives in the fragile economic climate. Without significant structural reforms, economic observers and global lenders worry that the federal budget will increasingly be absorbed by recurring support for loss-making state enterprises.
