How to Spend?

The Ministry of Finance has to work out an expenditure program as soon as possible.
The NPC Finance and Economics Committee has been disappointed with liquidation of the surpluses during the past two years. According to He, the dissatisfaction arises from doubts over the necessity of exhausting all available funds. 

"We are now facing a fiscal deficit of up to 300 billion yuan. The surplus should be put towards narrowing the deficit," he says.

It is reported that that when consulting the NPC in mid October, the Ministry stressed that it would avoid splitting the funds into smaller chunks, which are usually too small for any significant projects, for distribution among various ministries and provincial governments this year.

The Ministry suggested that the funds be directed towards education, health care, environmental conservation, social security, food security, historical problems, reducing the deficit, and adding to funds meant to stabilize the budget.

He says the NPC agreed on the suggestion, but the Ministry has to prioritize the choices.

He says that last year, 20 billion yuan of last years surplus was used to reduce the deficit. The NPC suggested this time that should be reduced from 300 billion yuan to 200 by using the surplus revenues. In response, the Ministry promised to increase the proportion used for deficit reduction.

A general framework of the expenditures has yet to be reported to the State Council, and even more details would need to be specified after the Council's approval. "After all, this is not just an issue for the Ministry alone, but for all the ministries," adds He.

There are big challenges awaiting the Ministry, which must balance between the State Council and the NPC, says He.