A new report released yesterday by the World Bank (WB) on inequality in South Asia, says that energy subsidies have disproportionately benefited the better-off.
In the case of Pakistan, the poorest 40 per cent of households received less than 30pc of total electricity subsidies, while the richest 20pc received close to 40pc.
The report titled “Addressing inequality in South Asia”, says the distribution of benefits improved after the October 2013 tariff increase in Pakistan, but electricity subsidies remain regressive.
Under stress a large majority of households in the poorest quintile borrow money, reduce expenditures, switch to lower-quality food, or reduce the quantity of food they consume.
Equally important, 11.5pc of the poorest households reported selling agricultural assets to cope with the shock, a strategy that compromises their long-term ability to earn a sustainable income.
The rich on the other hand were not similarly affected.
