The Finance Ministry remains optimistic that state enterprises’ investment budgets can help shore up the stuttering economy even though the government cannot yet fully disburse it, says a senior ministry official.
E-auctions of the state’s big investment projects worth a combined 66 billion baht, representing 15% of the total 427 billion baht investment, have stalled on concerns that bids under a caretaker government may be unconstitutional.
The e-auctions of large-scale projects worth at least 100 million baht are typically subject to cabinet approval, said a senior official who declined to be named.
Under the constitution’s Section 181 (3), the caretaker government is prohibited from launching or taking any action on new projects or creating a burden for the next government.
With the restriction, the government’s hopes that public spending in fiscal budget 2014 will be the engine driving the country’s economic growth this year has been scaled back, the source said.
Public investment is crucial to sustaining the economy this year amid the ongoing political turbulence prompting the private sector to adopt a more cautious approach to investment.
However, instead of using public investment budget that requires the nod of the cabinet, the investment budgets of those state enterprises that were granted approval by the cabinet before the House dissolution are ready for the government to use right away for accommodating the economic activities in time of the private sector’s slowdown.
“This budget is our hope to sustain the economy to cruise through this volatile period as we can see a gloomy future for the Thai economy at least in the short term. This investment budget for state enterprises can be spent right now and since it has already been approved by the cabinet before the caretaker government, it does not need to seek cabinet approval,” said a source.
Prasong Poontaneat, director-general of the State Enterprise Policy Office, said for this year alone public investment budget disbursement has been set at 25-30% of the total investment budget of 300 billion in each quarter.
The year-end target for disbursement is 70-80% of the budget.
From October 2013 to Jan 31, disbursement for fixed expenses stood at 821 billion baht or 39% of the total budget of the item, while investment expenses was done well with a disbursement of 125 billion.