ISLAMABAD - Finding difficulties in adopting revenue generation measures, the government is likely to further cut the Public Sector Development Programme (PSDP) in order to save billion of rupees and to narrow the fiscal deficit. As the government failed to introduce the Reform General Sales Tax (RGST) and Flood Tax from new year 2011, it is seriously contemplating several options to generate additional revenue to reduce the fiscal deficit, a senior government official told The Nation seeking anonymity. He was of the view that the best option available for the government at present is to further cut the PSDP by some Rs 40 to Rs 50 billion. It is worth mentioning here that the government had already slashed the PSDP by 50 percent from Rs 280 billion to Rs 140 billion after the post-flood situation of the country. According to the sources, the government was expecting to generate Rs 40 billion through Flood Tax and increase in Special Excise Duty, therefore, it had to generate same amount to control the budget deficit, which is already on the higher side and might be ended on around 7 percent of the GDP at the end of the current fiscal year. Besides cut in PSDP, the government is also considering to bring Plan B against RGST and Flood Tax, which might eliminate the tax exemptions given to several sectors through SROs and notifications. The government would also discuss the Plan B with the IMF officials who are likely to arrive in Pakistan in the coming weeks. The government has no other choice than to generate additional revenue in the remaining period of the current financial year to control the fiscal deficit, therefore, the governments economic team is working to prepare the alternative plans against the RGST and flood tax, another official informed. The sources further informed that the government is likely to introduce RGST in the coming fiscal year 2011-12, therefore, the government is planning to generate revenue in the remaining period of ongoing financial year. Besides new revenue generation measures, the governments tax department had also showed poor performance regarding the tax collection in the so far period of the current fiscal year, which also increase the problems of the government. According to the sources, the Federal Board of Revenue (FBR) had collected Rs 495 billion in the first five months (July-November) of the current fiscal year while the target was around Rs 550 billion, which registered the shortfall of Rs 55 billion. Meanwhile, the government is facing problems in achieving the tax collection target in the ongoing month of December. The sources feared that the shortfall could surge to Rs 70 billion in the first half (July-December) of the 2010-11.