Wednesday, November 9, 2011

Nearly Bt200bn set for rehab and rebuild

Nearly Bt200bn set for rehab and rebuild

The Yingluck government is allocating nearly Bt200 billion of the 2012 budget to address short-term challenges arising from floods and drought as well as to strengthen the macro-economic strengths.

Of total, Bt45.3 billion is allocated to ease the impacts of floods and drought. This fund will be partly used to support the artificial rain-making, expand the irrigation area by 302,000 rai, and manage the existing 24 million-rai irrigation area.

Another Bt120 billion is also set aside for flood impact rehabilitation and prevention. This amount will be used for the repair and construction of infrastructure as well as relief measures.

A budget of Bt20 billion is allocated to stabilise the fiscal position, Bt33 billion to boost agricultural product and competitiveness, Bt8.68 billion to boost the food manufacturing sector, Bt6.9 billion to promote trade and investment, and Bt89.3 billion for infrastructure. Highlighted in the draft budget are the development of five ports, wave barriers, high-speed trains to link Bangkok with Phitsanulok, Nakhon Ratchasim and Hua Hin, and the Yellow electric train line from Lat Phrao to Samrong.

Of total, Bt270 million is allocated for creative economy promotion, Bt2.69 billion for tourism, and Bt2.69 billion for IT.

The draft budget, which is under parliamentary discussion during Nov 9-10, sets the expenditure at Bt2.38 trillion, Bt210 billion or 9.7 per cent above last year’s level. Of total, Bt1.855 trillion is for fixed expenditure, Bt423.39 billion for investment, Bt46.85 billion for principal repayment, and Bt53.9 billion to replenish the fiscal reserves.

The central budget, pending for the government’s allocation, reaches Bt420.6 billion or 17.7 per cent of total budget. Of this amount, Bt120 billion rehabilitation budget is included.

Bhum Jai Thai Party leader Chavarat Charnvirakul urged the government to focus largely on flood rehabilitation measures and avoid all "luxury" projects.

"All the Bt400 billion investment budget should be allocated to help flood victims. I believe that people in the Northeast, North, and South will accept that infrastructure development could be a bit delayed. The government should also come up with a special budget, to explain in detail the sources of fund for damaged infrastructure repairs," Chavarat said.

Pichet Phanvichartkul, an MP of the opposition party, Democrat, noted that the government’s revenue would be hard hit by the inundation of industrial estates. This will be exacerbated by a cut in corporate income tax rates next year, which should cut the revenue by nearly Bt130 billion.

He lamented that despite the scenario, the government follows the normal track in setting the budget and in following through its election promises.
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