Higher allocation for development expenditure
THE government will increase its allocation for development expenditure (DE) by 4.3% to Rm56bil in 2020, compared with Rm53.7bil in 2019.
Operating expenditure (OE), on the other hand, will see a decline of 8.1% to Rm241bil, compared with Rm262.3bil in 2019.
Next year, DE allocation will be channelled towards promoting economic development, bridging urban-rural infrastructure gap and enhancing the living standards of the people.
Of the total Rm56bil allocated for DE, Rm53.5bil is in the form of direct allocation, while the balance of Rm2.5bil is for loans to state governments and Government-linked entities.
The higher allocation is mainly for accelerating implementation of programmes and projects in supporting the growth momentum and strengthening the long-term capacity of the economy.
Allocation are also provided for rationalisation plans of Felda and Lembaga Tabung Haji as well as higher debt servicing commitment of SRC International Sdn Bhd.
Of the 2020 allocation, Rm53.2bil is allocated for 4,744 ongoing projects, while Rm2.8bil is for 722 new projects. The economic sector remains the largest recipient at 55.4% of DE, followed by social (26.9%), security (11.7%) and general administration (6%) sectors.
As for the OE, the bulk will be allocated for emoluments, which is expected to increase marginally to Rm82.6bil in 2020 from Rm82bil in 2019, predominantly due to annual salary increments.
Supplies and services, the second-largest OE component, is expected to increase 27.7% to Rm38.5bil due to higher outlays for repairs and maintenance as well as allocation for professional services.
Subsidies and social assistance is estimated to increase 2.6% to Rm24.2bil in 2020 from Rm23.6bil in 2019. This is mainly for Bantuan Sara Hidup and welfare assistance; fuel and agriculture-related subsidies; toll compensation; as well as education-related assistance, including scholarship.
Fuel subsidies are estimated to be lower with the expectation to reinstate the managed-float system for RON95 and diesel in line with the implementation of targeted fuel subsidies programme.