ISLAMABAD - The PPP-led coalition govt is all set to announce its fourth annual budget on June 3, aiming to broaden the tax base of the country in order to curtail fiscal deficit at four per cent of the GDP for the coming financial year 2011-2012. The government is working on several options in order to restrict fiscal deficit at four per cent of the GDP for the coming financial year against the earlier plan of 4.5 per cent, a government official told The Nation. He was of the view that the government is facing several problems in this regard and due to the said problem the budget announcement was delayed for one week. The government earlier planned to keep fiscal deficit at 4.5 per cent of the GDP, however, International Monetary Fund (IMF) directed to keep it at four per cent of the GDP against the expected deficit of some 5.5 to 6 per cent of the GDP of the ongoing financial year. According to the figures, the overall volume of the next fiscal budget is expected to be around Rs 3.85 trillion against Rs 3.4 trillion of the outgoing financial year 2010-2011. The government has fixed annual tax collection target at Rs 1952 billion against the revised target of Rs 1588 billion of the ongoing fiscal year. The government has already finalized the revenue generation measures for the upcoming financial year, as it is planning to increase the rate of sales tax from existing 17 per cent to 30 per cent on electricity and natural gas supplied to unregistered manufacturers, retailers and restaurants to encourage documentation and increase revenue collection during 2011-12. This move would help in bringing the unregistered manufacturers, retailers and wholesalers to bring the un-registered persons into the documented regime. Similarly, the government is likely to include the elimination of tax exemptions on fertilizers, tractors and others in financial bill 2011. Meanwhile it is likely to include some other items including poultry feed, stationary items in the tax net in the coming budget. The government could also abolish the reduced rate of 4-6 per cent sale tax on the local supplies made to the unregistered persons of five zero-rated sectors for restoration of standard rate of 17 per cent sales tax on these sectors from 2011-12 Apart from taking revenue generation measures, the government might request the superior judiciary to dispose off tax related matters on priority basis, as billions of rupees cases are pending in the courts. The government would mainly focus on borrowing from the banks in order to achieve the fiscal deficit target, as it is not expecting huge amount from foreign sources. This move would lead to accelerating the inflation rate in the coming year. Meanwhile, the government is planning to keep defence budget at Rs 495 billion for the upcoming fiscal year against Rs 442 billion of the present financial year. The government would spend Rs 790 billion on interest payments against Rs 730 billion of the ongoing financial year. The Public Sector Development Programme (PSDP) for federal would be Rs 280 billion against revised Rs 180 billion of the present year. Meanwhile, the PSDP for the provinces would be Rs 430 billion. Meanwhile, according to the Annual Plan 2011-2012, the government has targeted the GDP growth at 4.2 per cent for the coming fiscal year. The inflation is targeted at 13 per cent as against expected CPI inflation of above 15 per cent in 2010-11, the exports are targeted at $ 25.8 billion, imports at $ 38.1b and trade deficit at $ 12.2 billion for the upcoming fiscal year, the Annual Plan revealed which would be presented in NEC for approval. Meanwhile, the agricultural growth target is set at 3.4 per cent with contribution of major crops three per cent, minor crops two per cent, livestock four per cent, fishery two per cent and forestry negative one per cent for the coming financial year. According to the Plan, the industrial sectors growth is expected to grow at 3.1 per cent with projected contributions of mining and quarrying growth of one per cent, manufacturing 3.7 per cent, construction, 2.5 per cent and electricity, gas and water supply one per cent. Meanwhile, the service sector is projected to grow by 5.1 per cent with contribution of transport storage and communication 4.8 per cent, wholesale and retail trade 5.2 per cent and finance and insurance 0.2 per cent.