With circular debt portraying a major concern for energy sector along with current electricity shortage in the country, the government plans to reduce power subsidy to Rs170 billion in the next budget from the present financial support of Rs220 billion, besides maintaining 17 percent GST on electricity. While in the final phase this amount of subsidy will be reduced to Rs84 billion.  The power sector experts indicated that in the present worse scenario the existing Rs100 billion circular debt will grow to approximately Rs220 billion by the end of FY12 despite monthly 2 percent increase in electricity rates as planned by govt.  They said that the government would reaffirm its commitment to gradually phase out electricity subsidy and power sector restructuring in the upcoming budget as agreed with the IMF. Power sectors experts viewed that despite the fact that government has raised electricity rates by 90 percent during last 3 years, cost of generation is still 35 percent higher than its selling rate due to higher oil prices. Full story