Bt3 tn readied for fiscal 2019 reforms

Economy January 11, 2018 01:00

By WICHIT CHAITRONG
THE NATION

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THE government plans to spend Bt3 trillion in the 2019 fiscal year on programmes aimed at reforming the economy and narrowing the country’s ever-widening income gap between rich and poor.



The Finance Ministry has also proposed a mid-year budget of Bt150 billion for the current 2018 fiscal year, ending in September, aimed at reducing income inequality.

The government has laid out a budget framework for fiscal 2019 with expenditure of Bt3 trillion and tax revenue of Bt2.55 trillion, resulting in a budget deficit of Bt450 billion, Dechapiwat Na Songkhla, director of the Budget Bureau, said yesterday.

The figure was finalised after Deputy Prime Minister Somkid Jatusripitak yesterday chaired a meeting with representatives from the Finance Ministry, the Bank of Thailand, the National Economic and Social Development Board and the Budget Bureau. 

“We aim to reform the country in many areas including the grassroots economy, the country’s competitiveness and bridging wide income gap between the rich and the poor,” said Dechapiwat.

The government projects an economic growth rate of 4.2 per cent in 2019, up from an estimated 4 per cent this year, he said.

Capital spending is targeted at Bt 600 billion, representing 20 per cent of total planned expenditure, as the government plans to invest in many infrastructure projects.

Current spending, such as on salaries of state officials and pension funds, would continue to represent a large share , as much as 70 per cent, of the total budget, Dechapiwat said.

The government will also provide funding for local governments of as much as 29.5 per cent of the total planned expenditure, up from 24.5 per cent of the total budget this year. Also factored in is a planned principal debt payment of Bt 70 billion, or 3 per cent of the total budget. 

An increase in funds to local governments stems from more funds being allocated to groups of provinces, or at regional level, not only at the level of individual provinces. The budget earmarked for reform purposes is estimated to be Bt1 trillion, so the government has to run same large fiscal deficits as the current 2018 fiscal year, Dechapiwat said.

The budget framework would be presented to the Cabinet for approval on Tuesday and it is expected to be debated in the National Legislative Assembly in June, he said.

Supplementary budget

State agencies are required to propose their expenditure plans by January 25.

Finance Minister Apisak Tantivorawong said the ministry would propose a supplementary budget for the 2018 fiscal year of Bt150 billion, on top of 2018 fiscal expenditures of Bt2.9 trillion. The additional expenditure would be submitted to the Cabinet for approval next week.

The additional budget is needed because the government has to spend more than Bt35 billion to support lower-income groups under the government’s welfare card programme. A further Bt 40 billion would be spent on agricultural reforms, especially to reduce rubber plantations by 10-20 per cent in order to shore up prices of rubber sheet and related products. Some Bt20 billion would be spent on promoting a community economy and Bt10 billion would go towards a village revolving fund, Apisak added.