March 31, 2014 00:00 By WICHIT CHAITRONG THE NATION
THE BUDGET BUREAU has urged state agencies to speed up their expenditure proposals for fiscal 2015. The budget process for the year is expected to be delayed for at least five months due to the political unrest.
The bureau chief is also preparing to introduce a 10-year plan that could see annual expenditures in the next decade almost doubled from the current year, from Bt2.525 trillion to Bt4.5 trillion.
Somsak Chotrattanasiri, Budget Bureau director, said some government agencies have yet to propose their spending for the next fiscal year. The fiscal year usually starts in early October.
The budget process has been delayed by the political turmoil, as February’s election was annulled by the controversial ruling of the Constitutional Court. The Election Commission has not yet decided when it will hold the House election, as it awaits the outcome of the Senate election.
“If the election commission could hold a new round of elections soon, the new government might be formed by June and a budget could be approved by the new parliament in February,” Somsak said during an interview to The Nation last week.
The Budget Bureau has to prepare for the expenditures and has urged state agencies to submit their spending proposals. Officials can submit current-spending proposals such as salary, public-health and other fixed-cost spending, but they cannot propose new investments.
Capital spending has to be decided on by the next government. The government planned to run a fiscal deficit of Bt250 billion for the 2014 fiscal year, with expenditures of Bt2.525 trillion against estimated revenue of Bt2.27 trillion.
According to its previous plan, the government would run a fiscal deficit of Bt200 billion for the fiscal 2015 year. However, the new government could run larger deficits if it wants to invest more to compensate for infrastructure projects worth Bt2 trillion that were shot down by the Constitutional Court.
A delayed election means that the new government may have only six months left in the 2015 fiscal year. So large expenditures may not be practical, according to Somsak.
The Budget Bureau will also introduce a 10-year budget plan in order to make a long-term commitment to fiscal prudence and effective spending, he said.
State agencies have to lay out their 10-year spending plan and propose it to the Budget Bureau, under the Long Term Expenditure Framework (LTF), he said.
The annual expenditures in the next 10 years would be about Bt4.5 trillion, almost double those of the 2014 fiscal year.
The expenditures increase about 7 per cent every year on average in nominal terms.
Economists have warned of sharply slower economic growth this year, and many of them have revised their forecast to below 3 per cent. The political turmoil has already hit the economy hard, as investment and consumption have weakened since street protests started in November last year. Public spending including by state-owned enterprises is equal to about 20 per cent of GDP.
The government spent about Bt2.8 billion on the Senate election and Bt3.8 billion on the House election. The costs are expected to rise if further elections are invalidated by the Constitutional Court.
Budget disbursement so far has gone as planned. As of March 21, the disbursement was 48.44 per cent of the total budget of Bt2.525 trillion, he said. However, the government is unlikely to meet its disbursement target of 95 per cent of the budget. The new disbursement projection is about 92 per cent of the budget, since many investment projects could not proceed, as there is no permanent Cabinet to give its approval.