In its quarterly news bulletin released yesterday, the ICC-B said the incumbent government will be presenting the last budget of its five-year tenure keeping in mind the next general elections.

"Naturally, the ruling coalition would not like to include anything that could make people unhappy. Rather, it might try to keep the people in general and various interest groups in good humour by offering some fiscal and other concessions."

The preparation of the budget will not be an easy task this time because of some adverse external and domestic factors, according to the ICC-B.

On the external front, one particular problem -- the higher prices of petroleum and some other commodities in the international market -- will continue to be a sore point in the next fiscal, the bulletin says.

The mismatch between the cost of procurement of petroleum and the prices at the retail level has been causing substantial drain on the public exchequer, it said. The report also added the multilateral donors have been pressing the government hard to make another upward adjustment in fuel prices as well as power tariff.

"But considering the effect of another hike in fuel prices on the already soaring prices of essentials and costs of transportation, the government did not give in to the donors' pressure."

The news bulletin also said some businesspeople during their pre-budget interactions with the officials of the National Board of Revenue (NBR) have advised to impose a flat rate of duty on imported essentials. Some other business circles have sought the facility to import duty-free raw materials and capital machineries for the industrial undertakings to help them become competitive in the global market.

"They have also proposed that the government, which has been compelled to go for large-scale bank and non-banking borrowings due to shortfall in tax revenue earnings and higher cost of oil, should consider adopting a more modern taxation and revenue collection system."

The ICC-B predicted that the government is unlikely to go for a major policy change/reform in the upcoming budget.

"But, certainly, some pledges relating to privatisation, adequate power generation, infrastructure development, eradication of corruption and improvement in law and order situation, that the incumbent government made before coming to power, would come under intensive review by its political rivals."

In some areas the government has done well and in some others its performance is not up to the target, the news bulletin added.