State budget to meet 30% of investment demand in next five years
The State budget could meet just 30% of the country’s financial needs for investment projects in the next five years, according to a medium-term development plan report by the Government.
Minister of Planning and Investment Bui Quang Vinh, speaking before the National Assembly (NA), said total capital for development investments in the 2011-2015 period grew by 1.8 times against the 2006-2010 period to VND5,617 trillion.
The ratio of mobilized capital to GDP has reached 31.2% on average in the past five years, lower than the earlier estimated 33.5-35%.
In the period, Vietnam Development Bank (VDB) has signed cooperation agreements with more than 30 commercial banks on credit guarantees for enterprises. VDB granted guarantee certificates with a combined value of VND10.7 trillion for 1,536 business projects and plans, but the bank has now paid nearly VND400 billion on behalf of 86 projects.
To increase the quality of plans using public funds, especially after the law on public investment came into force early this year, the ministry has prepared a medium-term investment plan to present to the NA.
Total development investments for the 2016-2020 period are estimated to amount to VND10,506 trillion, accounting for 31% GDP, with VND1,679 trillion sourced from the State budget.
Meanwhile, total capital proposed by ministries and agencies for the next five years is around VND3,710 trillion, 19 times higher than the 2015 plan and 2.2 times higher than what is managed in the period.
With the limited budget and capital allocations for priority targets, the ministry plans to prioritize paying public debt.
As of the end of last year, ministries, agencies and localities owed nearly VND20 trillion, with around VND4.3 trillion owed by ministries and agencies and some VND15.4 trillion by localities.
In addition, the amount of capital which has been advanced by the central State budget and has turned out to be irrecoverable totals VND60 trillion, VND34 trillion involving cities and provinces.
According to the ministry, as the budget is running low, the Government will only allocate capital for national target programs and projects which are about to be finished and no funds will be given to new projects.
