KARACHI - Federal Finance Minister Dr Abdul Hafeez Shaikh has said that the government is mulling issuing $1-2 billion worth of bonds in the local and international capital markets with the aim to curb budget deficit and national debt. Talking to this scribe after launching the margin trading system for equity investors at Karachi Stock Exchanges building here on Saturday, the minister said that apart from implementing the proposed tax reforms (RGST), the government was also seeking to generate other sources of revenue in order to reduce mismatch between revenue and expenditure in the absence of external financing. Raising revenue thorough the issuance of exchangeable and convertible bonds of the profit-making public and private sector companies is part of the governments new revenue enhancement strategy, he said. The convertible bonds of Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) would be launched soon, probably before the end of the current financial year, he added. Moreover, the shares of the government in the top commercial banks, including National Bank of Pakistan, Habib Bank Limited and Kot Addu Power Co. would also be offered to the local investors this year. Pakistans fiscal deficit is expected to grow by 5 per cent of GDP in the current financial year ending June 30, 2011, he said, adding that the federal government has started to implement fiscal austerity measures by freezing non-productive expenditure and curtailing the size of the federal cabinet. He advised the provincial governments to take such measures in order to increase their revenue base. He disclosed that the federal government would increase the development funds of the provincial governments to Rs300-400 in the upcoming budget. Earlier, speaking at the ceremony, Securities and Exchange Commission of Pakistan (SECP) Chairman Mohammad Ali said that the new mechanism of margin trading would address the liquidity and financing needs of the market. The SECP chairman highlighted that it also implied efforts for new product development like that of bringing in new derivative instruments to create the desired depth in the market and to provide investors with investment alternatives for portfolio management.