Presenting the budget in the National Assembly, finance minister Ishaq Dar said the government's top priority was defence, and "We have therefore increased our defence budget to Rs 142 billion," Dar told the House.The defence allocation was hiked by 10.9 per cent over revised estimates in the current fiscal of Rs 128 billion.

The budget, presented by the Pakistan Muslim League (PML) government, forecast a total outlay of Rs 642.2 billion, 5.9 per cent higher than previous budget estimate of Rs 606.3 billion in 1998-99.

The present budget, the third presented by the PML government since it came to power in February 1997, forecast current expenditure at Rs 525.9 billion, (81.9 per cent of the totalexpenditure) and developemnt expenditure at Rs 116.3 billion (18.1 per cent of the total expenditure).The other salient features of the budget are resource mobilisation through broadening of tax base, reduction in fiscal deficit and recovery of defaulted loans. Resource availability during 1999-2000 is estimated at Rs 655.9 billion, while net revenue receipts planned for fiscal 1999-2000 (July-June) stands at Rs 422.9 billion.

According to the budget figures, Pakistan will fall short on its revenue collection this year (1998-1999) while it initially expected to collect Rs 354.58 billion. It later revised the estimate downward to Rs 293.63 bilion. The PM government has also projected net capital receipts for 1999-2000 at Rs 44.1 billion and receipts from external resources at Rs 185 billion. Income tax, which has been difficult to collect in Pakistan, is expected to generate Rs 119 billion in revenues in the next fiscal.In Pakistan, a country of 140 million people, fewer than two million people pay incometax.