Karachi - Yesterday, Ministry of Finance (MoF) released its data for budgetary operations in FY11. Surprisingly, the fiscal deficit was reported at 6.6 per cent of the GDP in FY11. However, excluding arrear payment of electricity subsidy, the deficit actually clocked in at 5.9 per cent of the GDP. We believe the electricity subsidy is a major cause of concern for the country as it has distorted the functions of all segments of the economy. It has adversely affected the power and the fertiliser sectors as the gas consumption mix in the country has been altered. Electricity shortfall in the country has reached 6,000MW against the demand of 18,000MW due to reduced furnace oil and gas supplies. Similarly, for the fertiliser industry urea off take in 8M2011 is also down 4 per cent YoY due to the gas curtailment.
dated : 30-09-2011.