HARIPUR, June 11: The government was making efforts to enhance its Rs515 billion revenue base of the current fiscal year and expected to achieve the target of Rs565 billion during 2004-05, said federal parliamentary secretary finance MNA Omar Ayub Khan.

Speaking to Dawn here on Thursday, Omar Ayub said that as the government had already tabled a Fiscal Responsibility Bill in parliament, the budgetary deficit would not exceed from 5 per cent of the total new budget as against Rs179 billions of the outgoing fiscal year.

About debt retirement, Omar Ayub, younger son of former foreign minister Gohar Ayub Khan, said the government was committed to rid the country of debts through fiscal discipline and considerable cut in non-developmental expenditure, therefore it had planned to bring it down by $4.5 billion by the year 2007.

He said $1.17 billion expensive debt of the Asian Development Bank, due by 2009, was pre-paid and interest saving. Its early retirement would help the government save a hefty amount of $300 millions.

He said that during the current fiscal year, the government had earmarked Rs256 billion for this head particularly. In reply to a question, Omar Ayub said that compared to India, Pakistan's defence budget was approximately 3.8 per cent of the country's GDP whereas countries like Turkey and Israel spent 8 per cent of their GDP on defence.

About the public sector development projects, Omar Ayub told Dawn that a big chunk of Rs202 billions was being earmarked for the PSDP during 2004-05, while allocations for the PRSP would be 5.7 per cent of the GDP, which, combined with a larger GDP base, would translate into a large outlay.

He claimed that the GDP had grown by 6.4 per cent this year and would grow at a higher rate in 2004-05. The components contributing to the GDP measurement according to the expenditure approach were personal consumption, gross private investment, government expenditure and consumption, and net exports, he said.

Increase in the revenue target for 2004-05 from Rs515 billion to Rs565 billion is an indication that the revenue base of the economy had increased to unprecedented heights through proper documentation and collection.

About trickle down effects on poverty reduction, he said growth in cement, steel, telecom and other sectors pointed to a very strong resurgence in the economic activity.

The government, he said, was going to rejuvenate the agricultural sector by providing credit cards and offering tractors on lease to farmers. About the NFC issue, Omar Ayub said it was a dispute among the four provinces.