LAHORE, June 9: Former federal finance minister and Beaconhouse National University Vice-chancellor Sartaj Aziz has said rich-poor gap will further increase despite the government effort to present a relief-oriented budget.

Commenting on the federal budget 2007-8, he said the economic disparity was increasing in the country and the government itself had admitted that the gap between the rich and the poor had widened. In the budget, he claimed, the government had tried to provide relief to the poor by increasing wages and salaries but this would not reduce poverty.

He said the government had decided to subsidise the food items like pulses and sugar at the Utility Stores but this would not benefit more than five per cent of the population because the number of such stores was limited. The relief was also meaningless because the prices of essential commodities had increased by Rs11 to Rs20 per kilogramme. Food inflation had also increased by 10 per cent during the first 10 months of the current financial year and was expected to increase to 12 per cent by the end of this month.

He said increase in infrastructure development budget would create new employment opportunities but would not address the basic problems faced by the economy. Increase in current account and trade deficit was likely to slow down economic growth.