ISLAMABAD - The Pakistan Muslim League-Nawaz led-government is likely to unveil its first budget for the next financial year 2013-2014 on June 12 with total estimated outlay of Rs 3.4 trillion and deficit of Rs 1.62 trillion.

Sources said Finance Minister Senator Ishaq Dar is likely to present the budget 2013-2014 in the National Assembly on June 12 after getting approval from the federal cabinet on the same day. He would present the economic survey for the outgoing financial year one day prior to the budget. The National Economic Council (NEC), under the chair of Prime Minister Nawaz Sharif, would meet on June 10 to approve developmental budget and finalise fixation of macroeconomic target.

The estimated budget outlay could be around Rs 3.4 trillion. The budget deficit has been estimated at Rs 1,620 billion (5.8 percent of GDP) with provincial surplus of Rs 70 billion for the next fiscal year 2013-14. The budget deficit was projected at 4.7 percent for the outgoing year. The GDP growth is projected at 4.5 percent for the next budget. The inflation target will be fixed at eight percent for the next budget against projected estimates of 9.5 percent for the outgoing fiscal year 2012-13.

The sources said the cabinet meeting would also discuss increase in salaries/pensions. The finance ministry has proposed to enhance salaries by 10 to 15 percent and pensions by 20 percent. However, the federal cabinet, before announcing the budget, will decide how much increase should be given.

Meanwhile, the government will earmark Rs 627 billion for defence showing an increase of 10 percent against the revised budget of Rs 570 billion of the present fiscal year. Allocation for the Public Sector Development Plan (PSDP) will be increased to Rs 450 billion in the fiscal year 2013-14 against Rs 360 billion of 2012-13.

The government will allocate Rs 1.149 trillion for the payment of interest in the upcoming financial year 2013-14 against Rs 1.028 trillion earmarked for the current fiscal year 2012-13. The government will allocate Rs 155 billion for the payment of pensions for the next fiscal year 2013-14 as against Rs 141 billion of the year 2012-13.

According to the officials, the government will keep Rs 278 billion for the federal government service delivery as compared to Rs 262 billion of the ongoing financial year.

The government has planned to release Rs 364 billion for subsidies in 2013-14 against Rs 237 billion earmarked for 2012-13, which has witnessed an increase of 5.5 percent in the revised estimate.  The federal government will slash grant to the provinces to Rs 54 billion in the next year from Rs 57 billion earmarked in budget of the ongoing year.

The estimated total revenue (tax and non-tax) in 2013-14 will be Rs 2.833 trillion and FBR’s target will be Rs 2.675 trillion. The projected amount for non-tax revenue has been estimated at Rs 689 billion. Gross revenue will be Rs 3.522 trillion.

The federal government will transfer Rs 1.628 trillion to the provinces under the NFC Award after which net revenue available to the federal government is estimated to be Rs 1.894 trillion.

The government has planned to increase tax to GDP ratio to 10 percent of the GDP in the next financial year 2013-14 from revised estimate of 9.4 percent of the GDP of the current fiscal year. Investment to the GDP will be raised to 13.6 percent of the GDP from 12.6 percent and consumption to the GDP will come down to 93.4 percent in the next fiscal year from 94.5 percent of the current year.

Meanwhile, the public debt would be reduced to $57.5 billion in the next financial year 2013-14 from $60.4 billion of the current year.

Exports will increase to $26.1 billion in the year 2013-14 from $25.3 billion of the current year 2012-13. Imports are projected at $42.6 billion and remittances at $15.5 billion in 2013-14. The State Bank of Pakistan’s forex reserves in 2013-14 are estimated at $5.2 billion against $8.1 billion at the time of the budget announcement.