The Finance Ministry has launched 100-billion-baht bonds aimed at funding a budget deficit and refinancing debt incurred from the rice-pledging scheme of the previous government.
The bonds, named "Let's Be Happy", will be sold to the public from Jan 12-23.
The first tranche worth 50 billion baht will be issued by the ministry to fund the budget deficit in 2015. Bonds will mature in 10 years with interest rates at 3% for the first three years, 4% for the fourth to seventh years and 5% for the eighth to 10th years.
The second tranche worth 50 billion baht will be issued by the Bank for Agriculture and Agricultural Cooperatives and guaranteed by the ministry. Proceeds will be used to refinance the term loan from the rice scheme. This tranche will mature in five years with an annual interest rate of 3.8%.
Sales of the bonds will initially be held from Jan 12-18 with a minimum investment of 1,000 baht per person per bank. Maximum investment is set at 2 million baht.
Selling will be reopened from Jan 19-23 if all bonds were not sold in the first period. Maximum investment will not be capped.
Bonds will be sold through Bangkok Bank, Kasikornbank, Krungthai Bank and Siam Commercial Bank.
Finance Minister Sommai Phasee said the government would need to seek loans to finance other projects.
"The government will need to invest in national infrastructure projects including health care and education. It will need to continue its budget deficit," he said.
The government's budget stands at 20% of GDP.
"In future it should be increased to 25%, which is still considered low compared with Scandinavian countries where budgets stand at around 60% of GDP," Mr Sommai said.
Mr Sommai said the investment budget for water management programmes was likely to be double that of the previous government.
Under the fiscal 2015-16 budget, the government plans to spend 30-40 billion baht on water programmes. The plan was presented to the cabinet and the Finance Ministry has already allocated the budget.
Mr Sommai said Thailand still required loans for water management programmes and basic infrastructure projects.
The government will discuss a plan to increase the budget deficit. The Finance Ministry wants to increase the 2016 deficit to 300 billion baht or 2.5% of GDP from 250 billion baht or 2% of GDP in 2015.
Funds that come from the increase of the deficit will be used to invest in social and public health programmes. At the same time, the ministry will increase its focus on tax reforms.