The cabinet yesterday approved a 17.5-billion-baht budget for 74,655 Village Funds across the country at 250,000 baht each for local development. The move is a fresh bid to boost the rural economy, prevent people from borrowing from loan sharks and maintain the country's economic momentum in the final quarter.
The central budget for fiscal 2016 will be used as the source and Village Funds that receive the budget are required to kick off their projects between November and January.
Projects that will be financed by the new budget must be able to strengthen and benefit communities such as road repairs, renovation of schools and construction of silos for farm products, government spokesman Sansern Kaewkamnerd said.
To qualify for funding from the budget, each Village Fund must propose projects to committees in each district before they are forwarded to Deputy Prime Minister Somkid Jatusripitak and Prime Minister Gen Prayut Chan-o-cha for final approval.
However, Village Funds that obtain such capital are not allowed to use the money to buy equipment and the proposed projects must not duplicate previous ones, he said.
The government expects such investment in rural areas to support the economic growth momentum this year.
Activities in some sectors are slowing down amid the mourning period for His Majesty the King and this has led policymakers to closely monitor the impact for fear that the economic momentum will lose steam and growth will fail to reach the 3.3% forecast for this year by the National Economic and Social Development Board and the Finance Ministry.
Lt Gen Sansern said a survey by the National Statistical Office found that 98% of respondents in remote areas are satisfied with the government's projects to develop basic infrastructures in villages.
The government has so far disbursed more than 200 billion baht among rural people, who have been the most vulnerable during the economic doldrums and soft farm product prices. The largesse includes a 60-billion-baht budget to 60,000 Village Funds ranked grade A and B at 1 million baht each, another 500,000 baht each to 70,000 Village Funds, a 36.3-billion-baht scheme to distribute 5 million baht to each of 7,255 tambons nationwide and several schemes to help farmers.
In a related development, the Finance Ministry reported that farmers' income accelerated in September, with a growth of 4.5%, Lt Gen Sansern said.
Revenue derived from value-added tax (VAT) increased by 3.2% year-on-year last month, he said, adding that VAT on products and services rose by 5.2%, indicating improving domestic consumption.
Private investment in the 10 targeted industries is on the rise, with 158 billion baht worth of projects seeking Board of Investment privileges.
Foreign visitors in September numbered 2.4 million, up by 17.8% on year. For the first nine months, 24.8 million foreign tourists visited Thailand, up by 12.4%, generating 1.23 trillion baht, up by 16.1%.
Lt Gen Sansern said the economic growth in the fourth quarter will achieve the target, on the back of state spending and government measures to stimulate the economy.
In the meantime, Natee Khlibtong, secretary-general of the National Village and Urban Community Fund Office, said the government had already injected fresh capital to 70,000 Village Funds, leaving around 9,000 Funds that need to improve their performance to meet the requirement.
Regarding the government's recent injection of 500,000 baht to some 70,000 villages nationwide for local development, he said 92% of Village Funds have already disbursed money and the remaining Funds must propose projects to the National Village and Urban Community Fund Office for approval by November.
The government has so far approved pumping a combined 180 billion baht to Village Funds across the country and this amount has become cash flow for rural people to lower underground loans.
Even though the government has injected new capital to Village Funds, the amount is still small compared with the number of rural citizens, Mr Natee said.