ISLAMABAD, May 29: The federal government has identified three major sectors, including infrastructure development, which will get a massive amount of Rs120 billion in the coming budget.

Official sources told Dawn here on Saturday that major funding has been proposed for infrastructure development, agriculture and water sectors to be financed through a Rs200 billion Public Sector Development Programme (PSDP), currently being finalized by the budget planners.

The sources said that Rs300 billion worth of water projects, launched in 2001, could not be completed by 2007 as per schedule if major funding was not allocated in 2004-05 and subsequently in 2005-06 and 2006-07.

Similarly, infrastructure projects, especially roads, bridges, highways, modernization of ports and shipping, would be offered substantial funds in the new budget.

About the defence budget, another key official said that for the first time some increase was being contemplated in order to meet the requirements of the armed forces. A minimum of 10 per cent increase in the defence budget will certainly be effected, he asserted.

The year 1991 was being made a benchmark to revise upward defence expenditure from Rs160.3 billion in 2003-04 to about Rs177 billion in 2004-05.

In 1991, the size of the defence budget was Rs64.6 billion when the exchange rate parity stood at Rs22.4 to 1 US dollar.

"After 14 years, the defence budget has shrunk in absolute terms in 2003-04 when the Rs57.5 to 1 dollar parity is taken into account. Therefore, certain increase will have to be made to help purchase some urgent defence equipment for our armed forces," he said.

Replying to a question, he said that a file had been sent to the prime minister to decide about the budget date which was earlier tentatively planned for June 5.