ISLAMABAD, May 13: The new budget will be a ‘relief budget, containing no new taxes and offering a raise in salaries of government employees and a reduction in tariff of utilities, especially electricity, Dawn has learnt on good authority.

Sources on Saturday said that the measures were part of the government’s strategy to contain spiralling prices and its attempts to woo people ahead of the upcoming general elections.

The sources said that President Gen Pervez Musharraf and Prime Minister Shaukat Aziz had agreed in recent meetings that the new budget should provide some concrete relief to the people besides directing budget planners that there “must not be new taxes”.

Officials of the ministry of finance and other budget planners had been directed by the president and the prime minister to concentrate on two issues — how to increase the Public Sector Development Programme (PSDP) and reduce the number of taxes.

Sources said that the current PSDP, at present 3.8 per cent of GDP, was likely to be increased to four per cent. “This means that the current Rs272 billion PSDP will be enhanced to Rs 340-350 billion in 2006-07,” said a source.

An official ruled out the possibility of imposition of new taxes because of the expected elections in 2007 and said there would only be “minor adjustments and readjustments in the next budget”.

Sources said that in addition to an increase in salaries of government employees, officials concerned had also been asked to consider providing more relief to the people, like reduction in prices of various utilities, especially electricity.

“While we believe that power tariffs need to be revised downward for household consumers, the same has to be reduced for industrial and commercial users as has been asked by the World Bank,” a source said.

He said the World Bank officials during the recently-concluded Pakistan Development Forum and subsequent meetings with the prime minister and other officials had termed the cost of doing business in Pakistan very high and said that it needed to be reduced if it wanted to attract local and foreign investment.