LAHORE, June 15: Punjab Finance Minister Sardar Hasnain Bahadur Dareshak will present the provincial budget for the fiscal year 2004-05 with an approximate outlay of Rs180 billion or more, carrying an annual development programme (ADP) of about Rs40 billion, in the provincial assembly on Thursday.

Although the managers of the provincial kitty were tightlipped about the details, sources told this reporter on Tuesday that the government plans to mobilize an additional resource of Rs280 million by shuffling the existing taxes.

But, they claimed, no new tax is being levied in the budget which estimates total tax revenues for the next fiscal year to be around Rs20 billion. They said the tax collection for the current financial year had exceeded the target of Rs15.77 billion.

The Punjab is expecting to get Rs135 billion from Islamabad in the form of transfers from the divisible pool, straight transfers, 2.5 per cent provincial GST (in lieu of octroi and zila tax) and special grants.

The province is also hoping for an additional resource of Rs7 billion from the federation to offset the burden on its kitty put by 15 per cent increase announced by finance minister Shaukat Aziz in the salaries and pensions of government employees.

"The federal government didn't give the Punjab additional resource to meet the expense incurred on account of the previous increase in the salaries and pensions of the government employees this year.

Since we didn't get anything from Islamabad on this count, we did not transfer additional resources to the districts. The provincial government has intimated Islamabad that it will not be able to pass on additional resources to the districts even next year if it did not provide the required funds to offset the burden," the sources said.

The provincial development programme would be financed by the Punjab from its own resources and savings and foreign assistance in the shape of grants and loans.

In the next budget the provincial government is introducing what finance department officials term a new, revolutionary concept to "expand the development spending in the province". The concept envisages "corporatization of public finance".

"Though the details are being worked out, we are going to adopt an equity-financing model next year," said the sources, adding the details may be finalized before the post-budget press conference by the minister on Friday.

The new model envisages the establishment of new, private companies for carrying out development works in different sectors under the companies act. "These companies would be having top of the line people from public and private sectors on their boards and get seed money from the government in the form of equity.

These companies would be used to mop up inexpensive liquidity available with the banks for specific projects and sectors. This will increase the volume of the development spending in the province manifold," the sources said.

They said the private companies were being establishment because the provincial government could not borrow money from commercial banks. "Since these companies would be established under the companies act, they would be free to obtain loans from the banks at market rates, which are quite low at present, and spend them for carrying specific development projects," they said.

The sources said the provincial government followed a policy decision to increase its spending for infrastructure and other programmes even during the current year.

As a result, they said, the minister would also be presenting a Rs40 billion or so supplementary budget for voting along with the one for the next financial year.

The major thrust of the budget for 2004-05 would be on the improvement of facilities for healthcare, education, technical education, agriculture, irrigation, hydel power generation, agriculture research, housing and construction, etc.

The government intends to focus on industry, agriculture, natural resources and services sectors in the next budget and encourage private sector investment in these areas in order to help create one million jobs during the year as stated by Chief Minister Chaudhry Pervaiz Elahi at his pre-budget press conference.