Electricity Subsidies And Welfare Analysis In Pakistan

Pakistan Is Facing Energy Shortages Over The Past Many Years. One Of The Most Important Reasons For These Extraordinary Power Outages Is The Competing Use For Resources. Moreover, Energy Mix For Electricity Generation And Consequent Circular Debt Issue Are Also Aggravating The Situation. Government Of Pakistan Has Paid More Than One Trillion Rupees As Tariff Differential Subsidy (Tds) To Safeguard The Masses Against The Increasing Generation Cost Of Electricity. However, Tds, Being An Untargeted Subsidy, Is Not Only Piling Financial Burdens But Also Resulting In Welfare Loss.