ISLAMABAD - President Asif Ali Zardari on Thursday summoned the economic team to Karachi for crucial economic decisions, as the rising deficit is set to challenge the Governments commitments with International Monetary Fund (IMF) ahead of Reform General Sales Tax (RGST). A senior government official privy to the meeting told The Nation that the President chaired a meeting on Thursday that would continue on Friday. The meeting under the President involving top economy managers tried to envisage ways to stop borrowing from the central bank in terms of printing of currency notes. The Governments borrowing from the SBP was a double-edged sward as it increases inflation, besides resulting in soaring fiscal deficit. The deficit has already crossed the limit agreed upon with the International Monetary Fund under the standby loan programme. The deficit target for the current year at 4.7 per cent translates into 2.3 per cent in the first half. On the other hand the deficit has already reached 3.3 per cent in first six months of the current financial year. At the same time leading economic experts like Hafeez Pasha have already warned the deficit to go beyond even 7 per cent. Another former finance minister Dr Sulman Shah believes if it goes beyond seven per cent, it would an economic disaster for Pakistan. Therefore he understood that the Government would have to control expenditures while taking additional revenue measures. Since the current expenditures, chiefly on the ongoing war on terror, were beyond the control of the Government, it would have to apply a deep cut on the development budget. Dr Shah was of the view that the entire public sector development programme (PSDP) both at the Centre and the provinces would have to be cut down almost zero to contain deficit. On the revenue side he was of the view that additional measures such as export duty, excise duty, and increasing prices of petroleum products and electricity could help the government increase revenue. About the RGST he believed that consensus was not possible on it even in the next nine months given by the IMF in terms of extending the timeframe of the standby loan programme. Shah said withdrawal of GST exemptions could be one of the options but it would increase the tax refunds in case the export related exemptions are withdrawn. Earlier the official was of the view that the exemptions that could impact in terms of revenue increase were on the agricultural inputs and that were protected under certain legislations. Therefore, the withdrawal of the agro-related exemptions would require a legislation that was not possible in the given political scenario when the Governments coalitions partners were leaving it.