Local governments received only 24.1 per cent in the last fiscal year, even though the Fiscal Decentralisation Act obliges the national government to contribute 35 per cent.

"They have been neglected for a long time, so we have to consider this in the next meeting on Monday," Pridiyathorn said.

Some officials have proposed that local revenues be included in the 35-per-cent proportion, and for the central government to contribute only the balance.

Somchai Sajjapongse, a deputy director-general of the Fiscal Policy Office, said earlier that the government could meet the target "with some accounting methods".

Local governments may receive the budget in terms of public health services. And some projects, such as the CEO provincial governors, or Small Medium and Large (SML) village projects, may be considered part of the budget. Moreover, local governments may be allowed to raise a construction tax, he said.

However, there are concerns that local authorities won't be able to handle the budget efficiently, as decentralised administration is not fully functional yet, and budget distribution could be wasteful.

Pridiyathorn said the 35-per-cent target would not affect the country's investment budget.

Government revenues for the 2007 fiscal year are expected to be Bt1.42 trillion - Bt20 billion higher than forecast. But relevant agencies had not yet concluded the size of the budget deficit, he said.

Pridiyathorn said the deficit could decline or be in line with the planned level. State agencies would propose a deficit for Cabinet approval on Tuesday. It was reported earlier that the deficit would be Bt100 billion.

Anoma Srisukkasem

 The Nation