Ministry officials dismissed concerns  the large amount of money being spent on Sunday's controversial snap election would exacerbate the situation.

Finance Ministry spokesman Somchai Sujjapongse, responding to newspaper reports of a possible government financial shortfall, said it was not unusual for expenditure to exceed revenue during the early months of a fiscal year.

The current daily shortfall of cash is about Bt800 million, slightly higher than the Bt600-million daily shortfall at the same time of fiscal 2005, he said.

He said personal income tax will be collected this month and corporate income tax in May, and revenue will then exceed expenditure. He dismissed critics' charges that the present shortfall has been caused by the populist policies implemented by the government over the past five years.

State agencies and companies can draw money from the government budget and they will receive the money within three to seven days, he said. Previously, the Comptroller General's Department disbursed cash within three days.

Somchai also attributed the shortfall to subsidies paid to local governments as well as government spending carried over from last year.

He said government income in the first five months of the fiscal year, from October 2005 to February 2006, surpassed its target, indicating that the government's budget of Bt1.36 trillion for the current fiscal year will be met.

Finance Minister Thanong Bidaya also gave an assurance that the ministry would not need to borrow more money following its present plan to borrow short-term funds totalling Bt250 billion. However, a source said the ministry will today propose to Cabinet that it roll over promissory notes worth Bt5 billion, owed to the Government Savings Bank, for another two months.

Somchai said the ministry still has treasury reserves of Bt40 billion, and this is adequate for 14 days of spending - higher than the normal benchmark reserve of 10-days' spending.

Asked how the ministry will manage to pay for the snap election, which may exceed the planned Bt2.2 billion due to the possibility of several rounds of elections before a new government can be formed, Somchai said the government can withdraw the cost from its central fund.

Thammasat University economics lecturer Sakol Varanyuwatana said he was worried about wasteful spending on the snap election, when the political crisis is unlikely to end soon. However, he said it was too early to conclude that the government is facing a severe income shortfall.

"We have to wait for the next two or three months to see whether the government has financial troubles," he said.

The problem may lie in ineffectiveness of fiscal management, and in particular cash-flow management, he said. The start of implementation of some of the government's mega-projects may also contribute to the cash-flow issue.

Wichit Chaitrong

The Nation