The criteria for evaluating a budget usually is based on two things; the measures that it contemplates to accelerate the growth process and the improvements that it promises in the economic situation of the citizens of the country. The budget for 201-2012 presented by the finance minister - whose main features and even the envisaged tax proposals had already been revealed by the TV channels - with a total outlay of Rs.2504 billion represents a 12% increase in its volume over the current financial year. The Public Sector Development Programme (PSDP) with an allocation of Rs.730 billion as compared to Rs.466 billion for the current financial year also marks a substantial increase in the allocation for development purposes. The emphasis on the development of infrastructure and tapping the energy resources is a pragmatic and imaginative policy measure. In fact our industrial progress on which depends on the overall growth of the country is highly dependent on the availability of energy and has badly suffered due to the persistent energy crisis. This enhancement in the total outlay of the budget and the allocation for the PSDP, ostensibly is premised on the projected revenue collection target of Rs.1952 billion - which it wants to achieve through bringing more and more people into the tax net- and the projected revival of the economy. The economy of Pakistan undoubtedly has been badly affected by the devastating floods and the war on terror. Under these conditions achieving a GDP growth rate of 2.4 was not a bad performance. Thanks to 26% increase in exports that touched US$ 24 billion mark , remittances that are in the vicinity of US $ 12 billion and the foreign reserves of US$ 17 billion; an unprecedented phenomenon. Nonetheless the target of 4.2 growth rate envisaged for the next financial year, seems an ambitious target keeping in view the continued volatile economic environment and the security situation in the country. As expected the government has imposed 16% GST with a dual purpose of documenting the economy and raising domestic resources to reduce the budgetary deficit to 4% of GDP from 5.3 % during the current financial year. It is hard to take an issue with these measures as there is a general consensus that to get out of the present economic mess we have no choice but to enhance the tax base with a view to gradually reduce our dependence on foreign assistance and loans and ensuring the health of the economy. The imposition of new taxes is never accepted by the tax payers in any country ungrudgingly even though they are a vital ingredient to ensure continued progress and welfare of the people. The imposition of GST will undoubtedly affect the people in certain areas and might as well push up inflation but in the long term it is beneficial for the health of the economy and in improving the economic conditions of the people. The move to tax all kinds of incomes and enhancing the number of income tax payers is also a welcome step and is quite in line with the concept of dependence on direct taxes which are non-inflationary in their impact. The proposal to abolish special excise duties, reduce regulatory duties on 342 items and doing away with Federal Excise Duty on 15 out of 46 items currently under its purview and their eventual elimination will ultimately benefit the masses at large besides nudging the growth process. To enhance the availability of resources a programme of eliminating subsidies in a phasial manner has also been envisaged. To save the poorer sections and to provide them relief a system of targeted subsidies is being adopted. In this regard the government plans to provide sugar and wheat to the poor people on subsidized rates through its utility stores outlets. The finance minister has also indicated the possibility of privatizing PSEs. That if materialized will save Rs300 billion that the government is paying annually for running them besides netting substantial amount from the proceeds of their privatization. The reduction in FED on cement from Rs.700 per ton to Rs.500 and on soft drinks from 12% t0 6% is also an anti-inflationary policy initiative. The enhancement of income tax threshold from rupees three hundred thousand to three hundred fifty thousand will also benefit a large number of people. The raise of 15% in the salaries of the government servants and 15% to 20% increase for the pensioners announced by the government-though not enough to offset the going rate of inflation of 14% and the impact of some of the proposed measures that will spike inflation - is a welcome relief to the hard pressed govt employees. There is no denying the fact that under the prevailing economic conditions the government had very little room for manoeuvrability and its options were quite limited due to the resource constraints. The success of the initiatives taken by the government of course will depend on its ability to ensure their implementation in letter and spirit and of course the security situation in the country.