ISLAMABAD - Pakistan's overall budget deficit during the last financial year ending on June 30, touched the peak of 7.3 per cent of the total size of the economy, which is more than what the new government announced in the federal budget. Finance Ministry sources told TheNation that the gap between the government income and expenditure has further increased by a proportion of 0.3 per cent of the GDP, than what the new government announced at the eve of the federal budget.   Finance Minister, Syed Naveed Qamar in his budget speech on June 11, 2008, said that for the financial year 2007-08 the government expenditure, current and development, would exceed its income, tax and non-tax revenue, by 7 per cent of the total size of the economy. One of the top officials of the Finance Ministry said the deficit swelled against the expectations due to certain financial slippages in the federating units. "We try to convince the provinces to remain in parameters given by the federal government. The deficit further increased, as the provinces crossed the given boundaries", he added.   Shaukat Aziz-led economic team had estimated that the budget deficit from July 2007 to June 2008 would remain at four per cent of the total size of economy. In April 2008, the then Finance Minister, Ishaq Dar after taking charge of the economic affairs told the media that the Shaukat Aziz-led government under reported the figures and the deficit would be at 9.5 per cent of the total size of the economy by June 30, 2008. "Ishaq Dar was of the view that the new government should pay all liabilities, including subsidies on oil to the Oil Marketing Companies, during the just ended fiscal year, and the new government should start the next financial year with a clean slate," said the official by quoting the former Finance Minister of PML-N, who resigned with other party colleagues from the Cabinet on judges' restoration issue. The official said that the government decided to pay some of liabilities in the current financial year, starting from July 2008 to June 2009, that was why it announced to keep the deficit at 7 per cent, lower than Ishaq Dar's projection. On the other hand, the Finance Ministry officials said that they cleared all the liabilities, of which they were "conscious". The government reduced the gap between income and expenditure to 7.3 per cent by rationalizing some of the development and current expenditures, they added.    For the current financial year, July 2008 to June 2009, the government has targeted to keep the budget deficit at 4.7 per cent of the total size of the economy. The sources who are part and parcel of budget making process said even this target was ambitious, and the government may end up at 5.5 per cent deficit, even if everything happens as planned.   "How the government was projecting a negative growth in current expenditure as compared to the last financial year when it was expecting that the inflation would remain in double digits?" remarked the sources. For the last financial year the government had estimated current expenditure at Rs 1056 billion but it actually spent Rs 1516 billion in this head. For this new financial year, the current expenditures are estimated at Rs 1493 billion, which is 1.5 per cent less than the expenditure incurred during the last year. The government has also projected inflation at 12 per cent. The top bosses of the Finance Ministry defended their 4.7 per cent projection. They told TheNation that despite 12 per cent projected inflation, the government had a plan to restrict the current expenditure at estimated level of Rs 1493 billion. "Almost 90 per cent of the total current expenditure is either salaries or the goods, which will be provided to the government by the contractors at the already decided rates", they said.