Investment misses public target levels

Investment misses public target levels

Budget holdup hurts fiscal 2020 plans

A meagre 25 billion baht in investment budget was doled out in the first three months of fiscal 2020, as the months-delayed 3.2-trillion-baht budget bill has yet to be enforced, says a source at the Finance Ministry who requested anonymity.

The disbursed budget accounted for 4.4% of the total investment budget for this fiscal year, well below the target of 5.3%, and state investment fell by 50 billion baht, the source said.

The annual budget expenditure for fiscal 2020 was supposed to start on Oct 1, 2019 but was hampered by the lengthy government installation and legislative process.

Last Friday, the Constitutional Court ruled that the annual budget bill was valid but needed to be voted on again by the lower house for the second and the third readings, putting to rest uncertainty about further deferrals in passing the fiscal budget.

The court's ruling on the validity of the bill came after some MPs were accused of placing voting cards for those who were absent into a voting machine during the House's deliberation of the bill.

The source said 29.2% of the fiscal 2020 budget expenditure was taken out in the October-to-December quarter.

The law lets regular and obligation budgets be taken out based on the previous year's budget if the legislative process for the annual budget bill is incomplete before the fiscal year starts. New investment budget disbursement is prohibited.

The investment budget for fiscal 2020 amounts to 600 billion baht. Half has already been committed to contractors and the remainder is for new projects.

All the government can do is ramp up disbursement of the carry-over budget, the source said. Some 80 billion baht out of the 260-billion-baht carry-over budget was drawn down in the first quarter of fiscal 2020, down 14% from the previous year, the source said.

From the regular budget, 700 billion baht was withdrawn for the three months through December, a 14% year-on-year drop.

Pisit Puapan, director of the Macroeconomic Policy Bureau under the Fiscal Policy Office (FPO), said the government set 2020 as the year of investment to push economic growth.

Seven double-track rail routes stretching 1,480 kilometres represent the major public investment for this year. Those routes include Jira Junction-Ubon Ratchathani, Pak Nam Pho-Denchai, Denchai-Chiang Mai, Chumphon-Surat Thani and Surat Thani-Hat Yai.

State enterprises are estimated to take out 77% of the 346-billion-baht investment budget this year, Mr Pisit said.

The FPO forecasts private investment to grow 4.2% in 2020, compared with 2.6% predicted for last year.

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