ISLAMABAD (July 07 2009): Pakistan\'s policy-makers, involved in the budget making, are ready to sacrifice development budget for the first time after budget announcement before the International Monetary Fund (IMF) authorities in Istanbul. "When they would ask us how we are going to meet fiscal deficit in the face of inelastic expenditures, we have only answer of cutting development spending," says an official participating in the talks. The electricity subsidy waiver would cost the country almost Rs 70-75 billion (full-year cost and its six months cost is around Rs 35 billion) and carbon tax on compressed natural gas (CNG) will almost Rs 12 billion. Some are also anticipating the Federal Board of Revenue (FBR) revenue shortfall could be anywhere around Rs 100 billion. Though, the FBR revenue shortfall is the figure the Finance authorities are not going to concede before the IMF staff in initial discussion. Though, Advisor to Prime Minister on Finance Shaukat Tarin has a few measures in his mind, which can compensate a bit. These include cut in interest rate, which would save some Rs 40 billion from debt servicing after fall in inflation. But experts believe that would not help too as increase in petroleum prices and electricity ultimately would cost more. Bankers also do not agree from this calculation of saving from debt servicing. "This is the revenue short budget and from day one, we are envisaging fall in revenue," says the official. This leaves the country to cut development expenditure and society into a huge social gap that cannot be recouped in the next decade or so. A Rs 646 billion development spending will marginally cross current year near Rs 270 billion development budget because of no fiscal space. "There are no other options, we will go for public sector development programme (PSDP) cut and no releases would then be made ultimately," the official said. Budget\'s huge outlay is also being questioned when a bigger development budget is announced for a benchmarking and then all extravaganzas is charged to that head. Though the Fund has asked to manage the spending by not touching social sector spending, the social sector spending was also reduced last year. New levy to carbon tax is an idea, envisaged earlier to place a fixed charge and any change in international petroleum price is passed on to consumers, was set aside by former president Pervez Musharraf, who in a political vendetta, sacrificed this principle and the nation is still suffering it in the shape of circular debt. The government has also committed to the IMF to eliminate energy circular debt by August 15, which can also be missed as the revenue side is not that healthy and earlier bills were paid by getting funds from Employees Old Age Benefit Institutions (EOBIs