FPO eyes leftover funds to stimulate rural growth
The government is considering spending funds left over from local administrative organisations and uncommitted spending from carry-over budgets to stimulate the lagging economy, a senior Finance Ministry official says.
There is around 300 billion baht left over from the budgets of local administrative organisations, of which the Interior Ministry plans to take out 30% or 90 billion, said Krisada Chinavicharana, director-general of the Fiscal Policy Office (FPO). This money will be injected into the rural economy, with relevant organisations proposing suitable projects for these areas, he said.
The Finance Ministry also plans to recall uncommitted spending from the carry-over budget as another force to help revive the economy, he said.
The carry-over budget constitutes funds that had been set aside for spending on a particular project but went unused during a fiscal year and were thus transferred for spending in the following years.
The carry-over budget at the moment amounts to 307 billion baht, 230 billion of which has already been allocated for spending.
State agencies which were given permission to use half of the uncommitted funds from the carry-over budget had requested putting off setting spending commitments until this month. The other half may be recalled if it remains uncommitted.
Mr Krisada said some of the 230-billionbaht sum will be used by this fiscal year, ending on Sept 30.
The government is stepping up efforts to accelerate budget spending to try to shield the economy from ebbing exports stemming from China’s cooling economy and uncertainties among the major Western economies while other engines — domestic consumption and private investment — remain weak. It has set a budget deficit of 390 billion baht for this fiscal year and approved an additional budget of 56 billion for investment and spending in a bid to maintain economic momentum.
Regarding progress on the government’s stimulus, Mr Krisada said the additional 35 billion baht in loans to more than 70,000 Village Funds across the country are expected to be ready within the next two weeks.
The extra funding was approved by the cabinet in January to stimulate investment and consumption under the Pracha Rat (People’s State) initiative. The government will inject up to 500,000 baht in loans into each of the 79,556 villages nationwide. The loans are interest-free for the first two years and have a rate of 1% plus financing costs for the next three to seven years thereafter.
A 36.2-billion-baht budget covering 7,255 tambons has also been allocated for construction and repair projects. With a budget of 5 million baht each, Mr Krisada said 25 billion baht has been committed to the projects, with 7 billion already having been disbursed.
He said 27.5 billion baht out of the 40-billion-budget has already been withdrawn for small-scale projects.