Finance Minister Senator Ishaq Dar on Monday made it clear to the civil servants and pensioners to stop expecting any further increase in their salaries and pensions respectively, arguing that government has no fiscal space available with it to give more incentives.

"The government has increased the salaries and pensions of the civil servants and retired pensioners by ten percent in budget keeping in view the prevailing inflation in the country and available fiscal space", said the Finance Minister while briefing the Senate Standing Committee on Finance, Revenue and Economic Affairs that met under the chair of Senator Nasreen Jalil. The Committee is preparing budgetary recommendations of the Senators. The Senate's recommendations would be moved to the National Assembly. However, it is not obligatory for the Lower House to incorporate the proposals of Upper House.

"My wish is to enhance salaries and pensions by 1000 percent but there are financial constraints in front of us", Ishaq Dar said. He also informed the committee that government has also enhanced the medical and conveyance allowances of the officials up to BS-15 in the budget. Similarly, the government has upgraded the post of Superintendent from BS-16 to BS-17 in the current budget, he added.

Rejecting the impression of not allocating funds for eliminating circular debt, the Finance Minister said that government has allocated 'subsidy' in the budget that would be provided to electricity consumers using 200 units a month. Similarly, he said that Council of Common Interest (CCI) has recently decided to cut the 25 percent outstanding dues of power sector on the part of the provinces. Meanwhile, the government is taking action against power theft, he added.

The top economic wizard of the government has claimed that duration of power loadshedding has been reduced significantly during ongoing year compare to the previous years. Talking about the energy projects, Senator Ishaq Dar said that government has decided to start work on Diamir Bhasha Dam and Dasu hydroelectric power projects simultaneously. "The government would have been completed these two projects with its own resources worth of $23 billion, which were given in shape of subsidy to the power sector in last six years", Dar said.

The Finance Minister further said that government would organise International Investors Conference in Washington in September or October this year to seek foreign funding for Diamir Bhasha Dam and Dasu hydroelectric power projects. The government would utilise its own resources if it failed to woo any foreign assistance, he added. "Pakistan did not need any Indian No-Objection Certificate for the construction of Bhasha dam and foreign financial institutions also agreed on it, Senator Ishaq Dar informed the Standing committee. The government has allocated Rs55 billion for the construction of Diamer Bhasha dam in the next financial year.

He also said that Federal government has tried to make agricultural income tax as federal subject in the 18th constitutional amendment but provinces did not agree on it. He added that provinces should collect the tax, as its volume is much lower.

Ishaq Dar also briefed the committee on the proposed Public Sector Development Programme worth of Rs 525 billion for the coming fiscal year. He added that government would not cut the volume of PSDP during outgoing financial, as it would utilise Rs 425 billion. The government would bring budget deficit to 4.9 percent of the GDP during next fiscal year 2014-15 and to four percent in fiscal 2015-16.

He hoped that Federal Board of Revenue (FBR) would achieve its revised revenue collection target of Rs 2275 billion by the end of June 30 2014. He also informed that government would constitute consumer protection society in the county. The government has not only increase the volume of Benazir Income Support Programme to Rs 118 billion from Rs 75 billion but it also enhanced the number of families to 5.3 million from 4.8m in the recent budget.

Finance Minister said that government constitutes Tax Reform Commission after the approval of budget that would simplify the taxation process of the country.

Senator Ilyas Bilour of Awami National Party has objected the government's move to include Gas Development Infrastructure Cess (GDIC) in Finance Bill 2015, as he said that government should bring it as a separate bill in the parliament. Otherwise, it would negate the rights of three provinces, Sindh, Khyber Pakhtunkhwa and Balochistan. However, Finance Minister insisted that GDIC could be part of the Finance Bill. 

Chairman Federal Board of Revenue Tariq Bajwa said that government would bring top 10,000 retailers in the tax net during upcoming financial year.  The Senate Standing Committee unanimously recommended the National Assembly that government should provide subsidy on nitrogenous, phosphates fertilizers and micronutrients to increase the agricultural sector productivity.

Meanwhile, the committee also suggested withdrawing taxes on green houses equipment, high efficiency irrigation system and solar panels and pumps. The committee also recommended to give tax relief on cold chain development and cold storage facilities.