ISLAMABAD, May 9: A new Rs160 billion Public Sector Development Programme has been finalized by the ministry of finance, which is expected to be formally approved by Prime Minister Jamali on May 13, officials said on Thursday.

Officials said that senior officials of the ministry of finance have agreed to enhance the size of the PSDP, raising it from the previous level of Rs134 billion to Rs160 billion in 2003-04 budget, enabling the four provinces to undertake more development projects.

The increase in allocations, sources said, had been recommended in the sectors of science and technology, water resources, energy, transport and communication, agriculture, health, education and housing and physical planning.

“Substantial (increase in) allocations have been proposed for the water sector, which means construction of more small and medium size dams and roads,” said an official concerned.

When contacted by this correspondent, he said that more funds would be made available for rural electrification under the directives of both the president and the prime minister.

The PSDP, he said, was different from the poverty-related development budget, which had also been increased from Rs161 billion to Rs185 billion for 2003-04.

A number of ministries had reportedly complained that for the past many years that the actual disbursement of funds amounted to no more than 70 to 80 per cent of the allocated funds, which was hampering the completion of their development projects.

The issue, sources said, would also come up at a high-level meeting to be chaired by the prime minister on May 13.

Sources said that the authorities of the Central Board of Revenue were awaiting clear instructions from the finance minister about the levy of fresh taxes in the next budget. The issue, they said, would also be discussed during the meeting, which is to be held in the ministry of finance.

The prime minister, sources said, had opposed the imposition of new taxes and had reportedly said that the increase in poverty warranted “reliefs” and “not new taxes” in the next budget.

Likewise, they said, it was being proposed to further minimise the tax slabs.

“There is a proposal that calls for the zero-limit of tax should be increased to above Rs80,000 in the next budget,” another source said, adding that currently there was no tax on an annual income below Rs80,000. But on an annual income between Rs80,000 and Rs150,000, people have to pay 7.5 per cent income tax, which was considered to be very high, specially for the government employees.