ISLAMABAD, June 6: The federal budget, which is being presented on June 15, will have an increased allocation for defence spending for the first time in three years.

“Our defence budget, in actual terms, has been static for the last three years but now we need to offer certain increase in it in the budget for 2002-2003, said Finance Minister Shaukat Aziz.

Talking to Dawn here on Thursday he, however, declined to give any figure or percentage about the increase in the defence budget. “We are carefully examining the issue as we cannot ignore issues relating to our security,” he added.

India had increased its defence budget by 28 per cent, 14 per cent and 8 per cent in 2000-2001, 2001-2002 and 2002-2003, respectively.

“We have to look after the defence requirements of all the three services, keeping in view the fast changing security environment in the region,” the finance minister said.

A decision has been taken to introduce a 100 per cent self-assessment scheme from July 1, he said, adding that the purpose behind this move was to build confidence between the taxpayers and tax collectors.

“But self-assessment scheme does not mean that you start paying tax less than what you paid previously,” he said, adding that some more relief could be offered to the public in the next budget by ensuring that inflation remained under control.

A number of irritants that were blocking new investment will also be removed in the next budget on the recommendations of the Cabinet Committee on Deregulation. In this behalf, he said, hurdles created by the labour and social security departments will be eliminated to help the business community.

Responding to a question, he said the government will achieve 3.3 per cent GDP growth rate as agreed with the International Monetary Fund (IMF) for the current financial year. This growth rate, he said, could even touch 3.5 per cent as manufacturing and agriculture sectors have performed well.

He said India had envisaged a GDP growth target of 5.7 per cent but it had hardly managed 4 per cent growth and, as such, “our position is better than India’s”.

Similarly, exports have picked up and the CBR has started receiving considerable import duties, which otherwise had been declining due to the Sept 11 events, he said.

To a question, he said the Central Board of Revenue (CBR) was making all-out efforts to achieve the revised Rs414 billion revenue collection target for the outgoing year.

During June, he said, CBR has to collect roughly Rs50 billion to Rs55 billion. “We are also having a lot of non-tax revenues from petroleum levies, dividends, provinces and Wapda, which will help in the collection of adequate revenues by June 30 this year,” he added.

The finance minister said that revenue collection target for 2002-2003 could be in the vicinity of Rs445 billion to Rs450 billion. He said that the National Economic Council (NEC) — the highest body on economic decision-making — will be meeting on June 8 to approve various budgetary proposals, including the size of new Public Sector Development Programme.

The Annul Plan Coordination Committee had approved last month Rs140 billion PSDP for the next financial year. When asked whether the NEC, to be presided over by President Gen Pervez Musharraf, will increase the size of the new PSDP, he said it all depended on resources.

Before the NEC, Aziz said, Economic Advisory Board (EAB) will meet on June 7 to discuss the state of the economy and offer various proposals to further improve it.