ISLAMABAD - In a bid to bail out dwindling economy, the government Friday unveiled multi-pronged stabilization package to lessen fiscal burden and increase resources by withdrawing subsidies, generating more revenue and a speedy privatization process. Implementation of the package, which Minister for Finance and Revenue, Syed Naveed Qamar announced in a press conference, is likely to come hard on both the poor and the business class while supposedly easing down the government a bit on its fiscal obligations. "We have eliminated the entire fuel subsidy and electricity subsidy will be completely eliminated before June 2009, to keep budget deficit at targeted level of 4.7 per cent of the total size of economy," said Syed Naveed Qamar. "It's correct that we have burdened our people to share the crisis," he added and promised to give a relief if the international oil prices keep on rebounding. The package has come at a time when International Monetary Fund and Asian Development Bank are in the town to "advise" the government to overcome economic crisis. "This economic package is meant to bring stability in our system. It's our homegrown". The Minister said, "The plan is shared with development partners and hoped they would endorse it." The government would mobilize resources, said the Minister while shedding light on the second point of the package, which is focused on internal resources mobilization through more tax collection and non-bank borrowing to reduce dependency on State Bank of Pakistan's note printing, which the Minister said was inflationary in nature. The third point of the economic package is related to monetary policy. Both the Finance Minister and the Governor State Bank of Pakistan, Dr Shamshad Akhtar though did not categorically state to increase interest rate yet hinted to do so if and when required to control inflation, which the donor agencies have forecasted will surge by 20 per cent, almost double than the government estimates. Protecting fast depleting foreign exchange reserves also come at the core of the plan, said the Minister. The Governor SBP on a question said the minimum threshold of the reserves should be equal to three months import bill in the short-term. Pakistan's reserves have come down to US $ 8.92 billion. Finally, the economic managers have targeted to curtail current account deficit by attracting foreign investment in oil, gas and power sectors. A fast pace privatization process will be at the core of the policy. A top Finance Ministry official said that the government was estimating to collect Rs 60 to 70 billion more than Rs 1250 billion annual revenue collection target. The official said due to high rate of inflation, the economic managers were expecting more collection. He also hinted at levying taxes if required to keep budget deficit at 4.7 per cent, which has become "sacrosanct" in the eyes of both the government and the iinternational donor agencies. Syed Naveed Qamar said there was no subsidy on oil and gas anymore from the budget and added, if the government was subsidizing diesel and kerosene oil, it was taking this money from petrol and high octane by charging petroleum development levy. The Finance Minister said the government was looking to cut Public Sector Development Programme. "We have decided we will spend what we have and we will see what can be spent". Planning Commission has already in principle slashed PSDP size by Rs 102 billon. The government was facing a big menace of borrowing from State Bank of Pakistan. "Now the government has enforced self-discipline of net zero borrowing by end of the fiscal year". However, a key Finance Ministry official after the briefing told TheNation that this was linked with a condition of smooth foreign inflows. The second pillar of internal financing is launching of national saving schemes, commercial papers and Pakistan investment Bonds. "These measures would curb inflation", he added. The Finance Minister said due to more than targeted nominal GDP growth, thanks to inflation, the July-August revenue collection was more than the target, which was a healthy sign. Syed Naveed Qamar said interest rate in any market had to be reflective of economy and the Central Bank had been raising discount rates to keep pace between inflation and market demand. Governor State Bank, Dr Shamshad Akhtar stated that despite hike in discount rates, "Aggregate demand pressure was quite steep in the system". She negated that high interest rate was impacting on economy and said, "Demand in the market is not choked. The reason why inflation is high, it is because the aggregate demand is high". However, Asian Development Bank in its latest report said, "To the extent inflation in Pakistan is driven by high commodity prices, monetary tightening will have a limited impact on inflation and will most likely aggravate the economy's other structural problems". The government, which was finding it hard to get a bail package from abroad, had decided to attract inflows by focusing on privatization especially of oil, gas and power sectors. The oil and gas sectors would be attracting more investment, said the Minister. He said power demand was growing in the country, which was attractive for investment in the sector.