ISLAMABAD, June 6: The government has finalized the overall size of next year's budget at Rs901 billion, up by about 12 per cent from current year's estimates of Rs805 billion.

Finance ministry sources told Dawn that this amount would include a Rs202 billion Public Sector Development Programme (PSDP) and non-development budget of around Rs699 billion.

The government had allocated Rs160 billion for development and Rs645 billion for current expenditure for fiscal 2003-04. The sources said the focus of the budget would be competitiveness of large as well as small industries and agriculture sector, keeping in view the challenges of the globalization.

This target would be achieved through tariff reforms and realignment of fiscal policies to cut the cost of doing business. The cost of raw material would also be reduced and hassles would be minimized.

The overall fiscal deficit is projected at four per cent of the GDP or slightly over Rs180 billion while gross federal receipts are estimated at Rs818 billion, up by around 13 per cent from current year's estimates of around Rs728 billion.

Of the Rs818 billion receipts, tax revenue is projected at around Rs580 billion, up by over 13 per cent from budget estimates of Rs510 billion. Similarly, non-tax revenue is estimated at Rs175 billion for fiscal 2004-05 against the estimates of Rs157 billion. Revenue from surcharges is estimated to increase to about Rs70 billion.

Pakistan's defence expenditure is also expected to increase 'substantially' in real terms in 2004-05 to meet pressing defence requirements particularly of the Air Force and Navy.

However, official sources said, it would not cross Rs200 billion, adding that every cost would be paid for the defence. A government official said that since total size of the GDP was going up, the defence allocation would go up significantly.