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Special finance-budget mechanism yields positive results in Hanoi’s development

The mechanism has proven its necessity and practical usefulness for Hanoi's development, especially as this gives local authorities flexibility in budget management to adapt to the city's needs in certain situations.

The special finance-budget mechanism granted by the National Assembly (NA) for Hanoi has provided positive results for the city during its development.

 Chairman of the Hanoi People's Committee Tran Sy Thanh at the meeting. Photos: quochoi.vn

Chairman of the Hanoi People's Committee Tran Sy Thanh made the remarks during a meeting held by the NA Standing Committee on October 12 to take stock of the three-year implementation of Resolution No. 115 on the pilot implementation of the special financing-budget mechanism for Hanoi.

According to Thanh, drawing on greater authority and flexibility afforded by the mechanism, the city has proposed an entry fee scheme to address traffic congestion in the city’s downtown areas and is finalizing the details before submitting them to the municipal People’s Council for approval.

Thanh also noted over VND18 trillion (US$750 million) raised from the privatization and divestment of state capital from state-owned enterprises (SOEs) has been allocated for public investment projects in Hanoi during the 2021-2025 period.

 Overview of the meeting. 

In addition, the Hanoi People's Council has decided to allocate VND 7 billion (US$291 million) from the unspent wage reform fund for 319 ongoing infrastructure development projects in the city, and VND 180 billion (7.5 million dollars) from the city budget for social welfare, poverty reduction and the response to Covid-19 during the period 2020-2022.

The city’s mayor noted last year, Hanoi’s budget revenue stood at VND251.3 trillion ($10.45 billion), up 6.7% against the year’s target and 0.5% year on year. This year, the city’s budget is estimated at VND311.6 trillion ($13 billion), up 18% year on year.

Creating breakthroughs in Hanoi’s infrastructure development

Vice Chairman of the NA’s Finance-Budget Committee Vu Thi Luu Mai noted that following resolution No.115, Hanoi has gradually finalized its finance-banking framework; mobilize resources to create breakthroughs in infrastructure investment, especially in transport and technical facilities; effective and flexible use of resources for socio-economic development.

“Hanoi has also been able to allocate parts of its resources to aid other provinces/cities, showcasing the strong solidarity and support among sub-national entities,” Mai said.

Mai, however, noted the slow progress in implementing regulations on fee policies under the city’s jurisdiction, with one out of six having been approved by the Hanoi People’s Council so far.

“Delays in the privatization of SOEs have also impacted the city’s budget revenue,” Mai continued.

 NA Chairman Vuong Dinh Hue. 

NA Chairman Vuong Dinh Hue emphasized the necessity and practical use of the resolution for Hanoi’s development, especially as this gives the local authorities flexibility in managing the budget to suit the city’s needs during specific situations.

Hue called for Hanoi to draw lessons from the pilot implementation period and propose new policies for the city’s future development.

On this issue, NA Vice Chairman Nguyen Duc Hai urged Hanoi to continue ensuring the effective implementation of resolution 115 during the pilot phase, saying recommendations from the city would be incorporated into the revised Capital Law.