Law & Legal Updates / General /

Government determined to restructure state budget, control public debts

Aug 22, 2017 171
 Government determined to restructure state budget, control public debts

The Government on June 19 issued Resolution 51/NQ-CP to enact an action program to achieve the targets set forth in Politburo Resolution No. 07 dated November 18, 2016, on guidelines and measures to restructure the state budget and manage public debts in order to ensure the safety and sustainability of the national finance.

As laid down in the Resolution, by 2020, state budget revenues will account for 20-21 percent of the gross domestic product (GDP) during 2016-20, 1.65 times higher than the figures of the 2011-15 period, of which domestic revenues will represent about 85 percent of the total while those from crude oil and import-export activities will be estimated at 14-16 percent.

In addition, state budget expenditures during 2016-20 will account for 24-25 percent of GDP on average. Twenty-six percent of the total expenditures will be for development investment while regular spending will account for up to 64 percent of GDP.

The Resolution also sets the target to gradually reduce the budget deficit to 3.5 percent of GDP by 2020, while yearly public debts, government debts and foreign debts during 2016-20 will not exceed 65, 55 and 50 percent of GDP, respectively.

To achieve such targets, the Government sets forth major tasks and solutions, including restructuring the economy in association with renewal of the growth model, and enhancing the capacity, efficiency and competitiveness of the economy.

Specifically, public investments will be restructured for higher efficiency by eliminating inefficient and unnecessary investment projects. Meanwhile, private and foreign direct investments will be further promoted, especially in hi-tech projects, in order to boost socio-economic development.

Resolution 51 also sets the tasks of restructuring credit institutions; and fundamentally and thoroughly settling non-performing loans and handling weak credit institutions.

It proposes restructuring state budget revenues and expenditures, intensifying public debt management and ensuring the safety and sustainability of the national finance.

Meanwhile, the discipline of finance-state budget and public debts will be tightened. State budget revenues and expenditures will be maintained within estimated levels, while borrowings and disbursements will be within the planned limits approved by competent authorities. 

Under the Resolution, the state apparatus and personnel will also be strengthened toward improving the effectiveness of the state management of finance-state budget and public debts, and the streamlining and restructuring of cadres and civil servants on state payrolls will be stepped up in association with the reform of the public-duty and civil servant regimes.