Deputy Prime Minister Muhyiddin Yassin today denied that the government is being ‘too ambitious' in reducing next year's budget deficit to 5.6 percent from last year's 7.4 percent. NONE

Speaking to reporters after the Budget 2010 was unveiled by Prime Minister Najib Abdul Razak in Parliament, Muhyiddin ( left ) is optimistic about the current projection, stressing that "it is realistic".

This is despite many economists' expectations that Malaysia will face a bigger budget deficit next year.

According to Muhyiddin, the government will rely on important areas of subsidies in sectors which it believes can generate returns, rather than depend solely on income tax.

"This also includes certain taxes that have been imposed on items which we believe will add the government's income.

"So it is realistic as it is based on various sectors that we believe are good for this budget deficit reduction," he said.

Muhyiddin, who is also the Education Minister, however refused to answer if the government has any target to balance the budget.

He nevertheless asserted that it is more critical to reduce the budget deficit and at the same time encourage the economic growth.

"The most important part is how to manage within the budget and to (reduce) the deficit that we are facing," he said.

‘People's budget'

Describing the budget as a ‘people's budget', Muhyiddin is confident that the budget will prosper the people's living standard.

"The huge deficit is also expected to be reduced and this is the most challenging initiative made by the prime minister," he said.

Najib ( right ) NONE has also made a bold move, added Muhyiddin, in weathering the GDP for 2009, which is expected to be at -3 percent - better than the earlier estimation of -4 percent to -5 percent.

"This means that the economic growth will rise to six to seven percent within a year. For me, this is a bold move and I am confident the people will benefit from this," said Muhyiddin.

Najib had earlier unveiled the budget - themed ‘1Malaysia, Together We Prosper' - focused on the people and the National Key Result Areas (NKRA) with a push for the private sector to become a major contributor to the nation's economy.

Budget 2010's has a three-pronged strategy - driving the nation towards a high-income economy, ensuring holistic and sustainable development and focusing on the well-being of the people.

The total expenditure allocated is RM191.5 billion, which is 11.2 percent less that what was allocated last year (RM215.7 billion).

Of this, the proposed operating expenditure is RM138.3 billion and development expenditure is RM53.2 billion.

The government's income meanwhile has shrunk 8.4 percent to RM148.4 billion (RM162.1 billion in 2009).