ISLAMABAD, May 19: The budget for the next financial year will have a revenue target of Rs580 billion and a Rs200 billion Public Sector Development Programme (PSDP). A senior official of the finance ministry told Dawn that the federal cabinet was given a briefing on Wednesday on broad budgetary proposals.

The meeting, he said, appreciated the proposed increase in the size of the PSDP from Rs160 billion to Rs200 billion and revenue collection target from Rs510 billion to Rs580 billion.

The meeting was told that there would possibly be no new tax in the next year's budget and that the resource mobilization position would be improved by reforming the tax administration.

However, the official said discontinuation of roughly $850 million annual 'Saudi oil facility' was a 'big setback' which would affect the effort to adequately fund fresh development projects.

He said that the overall size of the 2004-5 budget would be close to Rs1 trillion (Rs1,000 billion), compared to Rs805.2 billion in the current financial year. The official said that the Rs200 billion PSDP allocation and some other new budgetary measures would now be discussed in the Annual Plan Coordination Committee (APCC) meeting on May 22, which would be later submitted to the National Economic Council (NEC) for final approval before the end of this month.

The finance minister will open the APCC meeting and the rest of the session will be presided over by Deputy Chairman Planning Commission Dr Akram Sheikh. The major focus of the budget, he pointed out, would be to improve the performance of the Central Board of Revenue (CBR) and to promote growth.

He said that more funds were required to adequately finance the new development projects including those in water and power sectors. Informed sources said that the government was under pressure to offer some 'tangible relief' to the masses and to raise the salaries of government employees especially those in lower grades.

The fortnightly adjustments in oil prices were causing problems to all segments of the society and the issue was raised at some high-level meetings held recently.