ISLAMABAD Aiming at economic revival and protection of industry, the PPP Government on Saturday presented a Rs 2.9 trillion consolidated budget with a deficit of Rs 722 billion (4.9 per cent of GDP) and growth target of 3.3 per cent for the 2000-10. Total consolidated expenditure for the fiscal year starting July 1, 2009, including that of provinces, is estimated to Rs 2897.4 billion (rounded to Rs 2.9 trillion). It compared to Rs 2174.9 billion estimated total revenues in the next year would leave Rs 722.5 billion deficit. The budget was presented in the National Assembly by State Minister for Finance Hina Rabbani Khar here on Saturday. In her speech, Rabbani disclosed that the total outlay of budget 2009-10(excluding provinces) is estimated at Rs 2482 billion (Rs 2.5 trillion). A major chunk of over 68 per cent of the total outlay would go to the current expenditures amounting to Rs 1699 billion, while the rest of the Rs 803 billion would go for development in the year 2009-10. Public Sector Development Programme (PSDP) amounts to Rs 646 billion in addition to Rs 157 billion development spending other than PSDP. The Government estimates show that the current expenditures for the next year would be 3.5 per cent higher than the revised estimates of the preceding year. Out of the total Rs 1699 billion current expenditures, a bulk of Rs 1189.082 billion are placed under the head of General Public Services while 20 per cent, or Rs 342.9 billion, goes to defense. A major chunk of the General Public Services, or a sum of Rs 576.77 billion, is for domestic debt servicing while Rs 132.446 billion is for foreign loans repayments and Rs 221.62 billion is for transfer payments. According to budget speech delivered at the National Assembly by Hina Rabbani Khar, Minister of State for Finance and Economic Affairs, the Government has imposed Rs 69 billions new taxes besides withdrawal of Rs 120.5 billion subsidies. This amount of Rs 189.5 billion is feared to realize in terms of general prices increase. The Government has left pending two of the important aspects of finance management, including the National Finance and the Pay and Pension Commission for public servants. The State Minister told the National Assembly that Government has constituted the National Finance Commission, which would be convened immediately in the next financial year. Meanwhile sources told The Nation that the next award was not likely to be finalized before a period of three months after its first convening. The Government has, at the same time, vowed to make efforts to increase provinces share in the divisible pool from 47.5 per cent to 49 per cent during next financial year. Khars budget speech also claimed that the provinces would receive federal transfers in excess of Rs 708 billion against Rs 600 billion in the last financial year. Since the issue of government servants remuneration is pending under the Pay and Pension Commission, the Government has provided an ad-hoc relief of 15 per cent increase in the salaries and pensions besides 10 per cent increase in ceiling of house rent or requisition fund. As a gesture of support, the Budget 2009-10 has also increased the allowance of armed forces personnel deployed on the western front equal to one months initial basic pay with effect from July 2009 as already announced by the President. For the remaining armed forces personnel an equal amount of allowance will be admissible from January 1, 2010. Besides increasing the income tax exemption limit, the Government has brought fees of banking services, import cargo handlers, stockbrokers, insurance companies, and electronic media for advertisements under the Federal Excise Duty and Value Added Tax mode. In a bid to protect the local industry and enable its revival, the Government has provided tax relief, increased duty on finished imports, and lowered duty on import of raw materials. It has also done tariff rationalization again keeping in view protection of local industry. As against the previous years nine point stabilization agenda, this year the Government has come up with a six-point-strategy. Six points include ensure economic recovery, maintain agriculture growth momentum, infrastructure including water, power, and transportation, achieve millennium development goals, balanced development, and rehabilitation of conflict-affected areas. Overall growth rate of 3.3 per cent envisaged for the next financial year is to be contributed by agriculture 3.8 per cent, manufacturing 1.8 per cent and services sector 3.9 per cent. According to the Federal Budget 2009-10, the limit for the exemption on income tax for salaried male was enhanced from Rs 180,000 to Rs 200,000 while the limit for salaried female was increased from Rs 240,000 to Rs 260,000. The senior citizens will enjoy 50 per cent relief in their tax liability in case of income upto Rs 750,000 from Rs 500,000. The government has eliminated 5 per cent FED on motor cars aimed to lowering the prices that would boost their demand and stabilize the local auto mobile industry. FED on telecommunication services has also been deceased from 21 to 19 per cent, and the activation charges of cellular phones are reduced from Rs 500 to Rs 250. On the revenues side, the Government estimates Rs 1513 billion as tax revenue including Rs 557.3 billion from direct taxes and Rs 955.76 billion from indirect taxes. Non-tax receipts would amount to Rs 513.647 billion. Thus the total revenue receipts would amount to Rs 2026.707 billion while external receipts are estimated at Rs 510.413 billion. Only Rs 65.438 billion would be grants while rest of the Rs 444.975 billion of external receipts would be in the form of foreign loans. Privatization proceeds are estimated to be Rs 19.351 billion the Government would be filling up budgetary gap of Rs 144.647 billion by credit from banking sector. APP adds: In order to discourage consumption of cigarettes, the State Minister for Finance said excise duty and sales tax on cigarettes is also enhanced that would generate estimated revenues of Rs 15 billion. For fiscal year 2009/10 the inflation target is 9.5 percent, which will be brought down to 7 and 6 percent during fiscal years 2010/11 and 2011/12, respectively. A targeted decrease in current expenditure to 15.3 percent of GDP in FY 2009/10 and 14.7 percent of GDP in 2010/11, owing to elimination of unproductive subsidies is planned in order to maintain the fiscal deficit at sustainable levels. Total revenue will grow by 15.7 percent and Federal Board of Revenue collection is projected to grow by 16.8 percent. Tax to GDP ratio will be 9.6 percent, with measures, as against 9 percent during fiscal year 2008/09. Revenue as a percentage of GDP is projected at 14.7 percent in fiscal year 2009/10 and will increase to 15.1 percent during fiscal year 2010/11. Minister of State for Finance said, Rs22 billion were distributed to 1.8 million people under Benazir Income Support Programme (BISP), adding that during fiscal year 2009/10, it is proposed to increase the allocation of BISP to Rs70 billion, an increase of 200 percent over the last years distribution. She said that a programme for the IDP has also been started by BISP wherein the internally displaced families are being identified and cash grants are being paid to them on regular basis. In the short to medium term, the BISP will also serve as a platform for complementary social assistance programmes, the main being health insurance for the poor and the vulnerable. She said that the government is committed to ensuring complete transparency in the management of BISP, adding that a census would be completed within three months in 16 districts of Pakistan as a pilot to benchmark incomes and would be extended to the entire country within the calendar year. She said the government would continue current pricing policy, besides supporting the sector by focusing on research and development by upgrading existing R&D facilities and initiating the establishment of two world class institutes of research for wheat and cotton. She said water sector has been allocated Rs60 billion, which comes to 14pc of the total federal programme. A total of 32 small and medium dams, 8 in each province are being financed. Similarly, adequate allocation has been made to the projects such as national programme of watercourses, irrigation system, rehabilitation, lining of canals, and distribution, etc. The government announced 15 per cent adhoc relief allowance for the serving and retired government servants from July 1, 2009. Minister of State for Finance and Economic Affairs Hina Rabbani Khar while presenting the federal budget for fiscal year 2009-10 announced to compensate government servants, I have the pleasure to announce an adhoc relief allowance of 15% of pay of serving government servants from 1st July, 2009. She also announced an increase in the allowance of armed forces deployed on the western front equal to one months initial basic pay with effect from 1st July 2009, as announced by the President of Pakistan. For the remaining armed forces personnel, Khar said an allowance equal to one months initial basic pay will be admissible from 1st January 2010 in line with the Presidential announcement; in the interim period, an adhoc relief allowance of 15% of pay will be allowed. This adhoc relief allowance will be withdrawn w e f 31st December 2009. The retired government servants and armed forces personnel will also get 15% increase in their net pension from 1st July 2009, the State Minister said. Rabbani Khar said Export Investment Support Fund worth Rs40 billion has been proposed for FY 2009-10 to help the industry move towards consolidation and value addition. She said a fund worth Rs10 billion for credit guarantees is going to be established to support the SME sector. The fund would be financed by the government and the private sector in the ratio of 50:50 over the next two years. She said for textile sector, withdrawal of FED on import and supply of Viscose Staple Fiber(VSF) and zero rating of chemicals used in manufacturing of fire retardant fabrics is proposed. She said that development of special economic zones and special industrial zones would be fast-tracked, adding that market access to USA and EU is being negotiated to provide level playing field to our industry in international market. In order to ensure transparency in the pricing of petroleum products and to reduce its use as well as assist in the cause of environmental protection, the petroleum development levy is being abolished and replaced by a specific carbon surcharge, she added. A concessionary import duty rate on 35 raw materials used in pharmaceuticals, medicines and diagnostic kits is also being proposed, the minister said adding that zero rate sales tax on import and supply of wheelchairs for the special people is proposed. APP adds: Sixteen per cent Federal Excise Duty was imposed on advertisements of print media, hoarding boards, billboards and signboards. This will be received through advertising companies. Earlier, this duty was imposed on advertisements of electronic media only.