February 08, 2007	Thursday	Muharram 19, 1428

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ISLAMABAD, Feb 7: The government is considering a proposal to impose "tight control" on expenditures relating to public administration, defence and debts.

The objective, official sources told Dawn on Tuesday, was to ensure adequate financial management of resources at federal and provincial levels.

The sources said the government had been requested by the Planning Commission to reduce its fiscal deficit through a number of reform programmes including "tightening its management control over federal and provincial expenditures".

A strategy will be finalised this month to limit the government's overall expenditures and it would be placed before the National Economic Council (NEC) for approval. The NEC is the highest decision-making body on economic issues.

However, an official concerned said that it needed a "firm political will" on the part of the government to reduce unnecessary expenditures, particularly on defence. Once some broad peace agreement with India on Kashmir and other issues was reached, he said, it would perhaps be possible to reduce the defence budget.

"But personally I do not think that defence expenditure would ever be reduced in Pakistan," he said, adding that the role of public pressure groups, especially the media, was very important to seek reduction in defence budget.

Informed sources said that various proposals were being finalised in the form of "final draft" of the Vision 2030 of the Planning Commission to ensure improvement in the country's overall economic and financial system.

The initial draft of the Vision 2030 prepared last month also proposed reduction in expenditures through downsizing of the government at federal and provincial levels, with capacity enhancement at the local level.

The government was urged to reduce public expenditures also by rationalising non-development expenditures and reallocating budgetary resources towards high-priority social services and essential operating and maintenance expenditures.

The government was asked to reduce the fiscal deficit, which is 4.2 per cent of the GDP for 2006-07, through a number of reforms including the enactment of the Fiscal Responsibility and Debt Limitation Act that was approved by parliament. The act provides measures to eliminate the revenue deficit and minimise public debt to a prudent level by effective debt-management.