| GEO Business|
| Federal budget of Rs.3.2 trillion to be presented today|
| Updated at: 0113 PST, Saturday, June 05, 2010|
ISLAMABAD: The national budget of Rs.3.2 trillion for fiscal year 2010-11 beginning July 1, has allocated Rs.450 billion for defence, will be presented in parliament on Saturday.
The budget, which will be presented in the National Assembly, the lower house of parliament, has, however, deferred the imposition of value added tax (VAT) due to opposition from the provincial governments.
The Rs.450 billion allocated for defence is Rs.107 billion more than the Rs.343 billion allocated for the 2009-10 fiscal. A separate allocation would be made for the war against terror.
Quoting official sources, media reported Friday that the budget will recommend a 20 to 25 percent rise in salaries of government employees while tax recoveries have been targeted at Rs.1.7 trillion.
The budget has allocated Rs.660 billion for the Annual Development Programme (ADP), while sales tax will be increased one percent and incentives have been given for the salaried class.
According to sources pricy to finance ministry, the regulatory duty on more than 250 edibles would be removed while an increase in the tax on cosmetics, tobacco and electronic goods is likely.
According to sources, the duty on import of vehicles is likely to be reduced by 10 percent, while a six percent increase would be announced in electricity prices.
The establishment of new power distribution companies would also be announced in the budget.
A special cabinet meeting chaired by Prime Minister Yusuf Raza Gilani would be held Saturday to give the final approval for the budget. The cabinet would also take a final decision on increasing the salaries of government employees.