ISLAMABAD - The government Tuesday announced the mini budget through a presidential ordinance as it imposed 15 per cent flood surcharge, increased special excise duty by 1.5 per cent, withdrew the sales tax exemptions on fertilizers, pesticides and tractors and facility of zero-rating on plant, machinery and equipment including parts thereof was also withdrawn. Meanwhile, the zero-rating on five major export oriented sectors (textiles, carpets, leather, sporting goods and surgical goods) has been restricted to registered exporters and manufacturers-cum-exporters for export purpose only. The eliminating zero rating facility means imposition of general sales tax on the above sectors. The economic experts said that prices of cloths, shoes, sports commodities, fertilizers and tractors would increase in the coming days. Similarly, the GST on sugar would be increased to 17 per cent from existing eight per cent. These taxation measures would assist the government in achieving the revenue target of Rs 1600 billion during the ongoing financial year 2010-11. President Asif Ali Zardari through an ordinance issued these taxation measures on Tuesday. It is worth mentioning here that the government had tabled the bill of reform general sales tax and flood tax in the parliament, however, due to strong resistance from the opposition parities as well as its coalition partners it failed to get it passed. Therefore, the government issued these taxation measures through the ordinance. Meanwhile, the government introduced the austerity plan that included imposition of ban on fresh recruitments for government vacancies, unless process already initiated through proper advertisements. Meanwhile, the Public Sector Development Programme (PSDP) has been rationalized, while protecting projects in social sectors, less-developed areas and of strategic significance. Surrender of budgetary allocations beyond last years level and exercise was undertaken successfully to secure surrender of excessive budgetary allocations over and above the last year. Meanwhile, in other savings, numerous other small heads of account relating to grants to entities and bodies outside the government have been closely examined and savings effected. In POL entitlements, purchase of stationary and travelling allowance, the expenditures on these heads are cut by half. Meanwhile, there would be a complete ban on purchase of durable goods. According to a statement issued by the Ministry of Finance, the government is committed to stabilizing the economy and pursuing its reforms agenda despite the shocks of unprecedented floods and rising oil prices. The budget deficit, which some observers had predicted to cross eight per cent has been reigned in and will be under 5.5 per cent of the GDP. Recourse to State Bank of Pakistan borrowings has aggressively managed. SBP borrowing stood at Rs.68 billion at end-February 2011 from a high of Rs.321 billion reached during the first half (July-December) of the ongoing fiscal year. The inflation rates have begun to decline for the last two months. During February 2011, the CPI was 12.9 per cent significantly down from 15.7 per cent recorded in December, 2010. The external sector has shown extraordinary performance. Exports have increased by 26 per cent in the last eight months. For February 2011, growth in exports was at historic 46 per cent. Exports at this rate are likely to cross $25 billion. Remittances will surpass the $11 billion mark, which will also be historic. More works remain to be done to ensure that these gains are consolidated and a solid foundation is laid for stability, growth in the economy and the prosperity of the citizens.