ISLAMAB­AD - Preparations for budget, which is likely to be announced on June 3, are in full swing in federal capital. In upcoming budget, the government is likely to keep budget deficit target at 4.8 per cent of the GDP for next financial year 2014-2015.

“The budget is most likely to be announced on June 3, 2014”, said Finance Minister Ishaq Dar while talking to The Nation. Meanwhile, the finance ministry has accelerated its efforts for preparing budget for next financial year, as federal cabinet would meet today (Thursday) to give approval of Budget Strategy Paper. Similarly, the National Accounts Committee (NAC) would also meet on the same day to calculate the figures of country’s economic growth.

Meanwhile, the Annual Plan Coordination Committee would meet on May 23 to approve developmental budget, followed by National Economic Council meeting on May 26.

Sources further informed that government has planned to keep budget deficit target at 4.8 per cent of the GDP for next financial year 2014-2015. Similarly, the government has decided to allocate Rs 525 billion for public sector development programme (PSDP) for next financial year as against Rs 540 billion of the outgoing fiscal year. Meanwhile, the government is likely to fix country’s GDP growth target at around 4.4 per cent for next year. The government is likely to keep tax collection target at Rs 2.81 trillion for next financial year, which is downward revised to Rs 2275 billion in the outgoing year.

The Economic Advisory Council met on Wednesday under the chair of Finance Minister to review the budget proposals. Sources informed that Finance Minister briefed the meeting that no new tax would be imposed in the budget however the government would broaden the extremely low tax base of the country by bringing wealthy non-taxpayers into the tax net.

Dar briefed the Economic Advisory Council on recently completed 3rd successful review by the IMF and on the latest economic indicators. He said that the economy of Pakistan is taking off and we are now in a comfort zone as far as our foreign exchange reserves are concerned. He said that with the over subscription of Euro Bond, successful auction of 3G/4G Spectrum and improved economic indicators, the international confidence in Pakistan has increased to a level where we can build stronger economic base. He added that each and every proposal of the EAC will be considered seriously and where possible their valuable contributions will be implemented.

The Industry and Trade sub group, represented by A Razak Dawood, discussed in details the proposals for the diversification of the export base by promoting value-added exports like engineering, IT, chemicals and food processing. The group further recommended deregulation of the economy by creating a level playing field to allow new entrants in the local manufacturing field as compared to the imported finished products. The group further discussed the proposal for simplifying the tariff structure and moving away from the import substitution to export led growth along with maintaining the transparency, consistency and simplicity of tariff structure. The sub group on Resource Mobilization and Expenditure Management, convened by Dr. Miftah Ismail, proposed that the tariff rationalization process needs to be expedited to provide a level playing field to businesses. The sub-group further proposed that an automation process at the FBR may be improved by developing an integrated IT system to improve service delivery and enhance transparency. On the expenditure management side, the sub group also suggested formation of a Task Force/ Commission to analyze overall expenditure management in the federal government including throw forward in the capital budget and make suggestions for the improvement and elaborating the expenditures on social sector in the budget. The energy sector sub group, convened by Farooq Rahmatullah, proposed the possibility of drilling over 100 wells in the next financial year for the development of oil and gas sector.

 Another proposal pertained to improvement in recovery mechanism by Ministry of Water and Power to collect the amount due to both public and private sector. The group further suggested revision of the sectoral priority in order to give preference to power sector and industry.

Dr Abid Qaiyum Suleri, the convener of Food Security and Agriculture sub group, presented a proposal to revise the food security agendas and policies according to the new definition of Poverty line of $2 a day.

The other proposals included formation of a National Food Security Council with representation of provincial governments and other relevant stakeholders, co-chaired by Federal Ministers for Finance and Food Security & Research and introduction of special nutrition programs for children under 5 years. School Feed program in most food insecure districts of Pakistan and Stimulus programs to expand farm outputs and market access with the help of National Food Security Council were also proposed.

The social sector sub group was represented by Dr. Sania Nishtar. The group presented various proposals including the establishment of Geographic Information System (GIS) based Social Sector Information Observatory, resolution of the post 18th amendment outstanding issues and developing instruments to cater to demand side of social protection needs.