ISLAMABAD - The fractured PPP coalition government on Wednesday presented its first federal budget of Rs 2010 billion for fiscal 2008-09 with a budgetary gap of Rs 174 billion and estimated fiscal deficit of Rs 582 billion or 4.7 per cent of the GDP. One way or the other the government has managed to balance the deficit budget through parallel measures of increased taxation and relief steps for the lower income classes. On top of the relief increase in the government servants' salaries and pensions went up by 20 per cent in addition to doubling of the travel allowance of the grade 1 to 19 employees. The minimum pension level has gone up from Rs 300 to Rs 2000, besides significant increase in the medial allowance. Along these measures, Naveed Qamar in his budget speech also stated that the govt would increase the strength of the country's apex court from 16 to 29. Finance Minister also announced during his budget speech that the minimum wage would increase from Rs 4600 to Rs 6000 per month. To improve dismal state of the savings, the government has increased rate of return by 2 per cent on the saving schemes. As Prime Minister Yousuf Gillani had already announced the budget has also regularized the contract staff up to basic pay scale of 15. Keeping Agriculture on top priority the government has given concessions in on the agri-related taxes in addition to the subsidies. However, in overall context the size of the subsidies has done down by almost 28 per cent from Rs 407 billion to Rs 295 billion. According to the estimates of the Federal Board of Revenue the new taxation measures would generate Rs 71 billion's additional revenue. On top of the new taxation measures is the increase of one per cent in the general sales tax (GST) across the board that going to hit the general public already hard pressed by the inflation at 11 per cent which is likely grow at 12 per cent next year. As part of the new taxes the government has proposed 2 per cent uniformed rate tax on commercial as well as industrial importers. Mobile phone sets have also been slapped with a levy besides the increase in taxation on imported luxury vehicles. To tap extra-ordinary growth in the telecom sector the government has increased federal excise duty rate by 6 per cent from 15 per cent to 21 per cent.           With all its efforts the government could contain the fiscal deficit of the outgoing financial year at Rs 737 billion or 7 per cent of the GDP due to what it claimed the political turbulence and economic upheavals during the outgoing financial year. Like all other targets, the government's target to reduce the yawning fiscal deficit at 4.7 per cent is also said to be ambitious as it hardly described any means to achieve the goal. Although Finance Minister Syed Naveed Qamar did reveal the figure of the overall consolidated outlay including that of the provinces' share in it would stand at Rs 2300 billion. Out of the total federal outlay of Rs 2010, an amount of Rs 1493 billion would to for the current expenditures while Rs 516 billion is the share of the development budget for the coming fiscal starting July 2008. Total allocations for the development in the next financial year amounts to Rs 592 including Rs 549 billion Public Sector Development Programme and Rs 43 billion out side the PSDP. Although the government has approved the PSDP of Rs 549 billion but an estimated perforce operational shortfall of Rs 77 billion would cut it down the size of Rs 516 billion. Major heads of the 1493 billion current expenditures on the revenue accounts would include Rs 929 billion on General Public Services, followed by the Defense at Rs 296 so on and so forth. A major chunk of Rs 619.357 billion out of the General Public Services making roughly 30 per cent of the total expenditures would go for the debt servicing. The Minister said the government has decided to increase duty on some 300 luxury items by 15 percent to 35 percent to discourage their import in the country. The unnecessary items which fall under the category of 'luxury items' include: perfumes, decoration items, crockery, tiles, furniture, hunting weapons, air conditioners, refrigerators, deep freezers and cooking range, etc. There is also a proposal to increase duty on biscuits, chocolate, cookies, cigarettes, cigar and ready-made food items.