President U Win Myint attends Finance Commission meeting (2/2018)

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The meeting of the Finance Commission in progress yesterday in Nay Pyi Taw.  Photo: MNA

President U Win Myint, Chairman of the Finance Commission, addressed the Finance Commission meeting (2/2018) held yesterday morning at the Presidential Palace.
The meeting was attended by State Counsellor Daw Aung San Suu Kyi, Finance Commission Vice-Chairmen, Vice-Presidents U Myint Swe and U Henry Van Thio,Secretary Union Minister U Soe Win, members the Union Attorney General, the Union Auditor General, the Nay Pyi Taw Council Chairman, along with Chief Ministers from states and regions.
President U Win Myint said the present Finance Commission meeting (2/2018) is being held to discuss and adopt the Union Budget Estimate for Fiscal Year 2018-2019 and the Union Budget Bill for Fiscal Year 2018-2019.
Section 221 of the 2008 Constitution requires that the Union Government draft a Union Budget Bill based upon the annual Union budget, and after coordinating with the Financial Commission submit it for approval to the Pyidaungsu Hluttaw. As per this section, the Financial Commission is to support the Union Budget Bill for Fiscal Year 2018-2019.
FY 2018-2019 is the first budget year after the new fiscal year was designated. The outcome of designating a new fiscal year will result greater than expenditures than usual, and it is believed it will assist in improved economic development of the union.
The government is consistently working for the benefit of the people and to ensure the full cooperation of those public servants who are participating in the main sector of establishing the union to perform their duties in the union reform work processes, thus their salaries were increased 10 to 20 per cent.
Regarding capital expenditures, the construction and procurement budgets estimated and requested should be for work that can be completed within the fiscal year. Priority is to be given to ongoing work projects, and work projects are to be drawn up in accordance with the priority policies set by the State. Funds are to be requested for construction work only when the land for construction is obtained. Funds are to be requested for tenders that already have designs and can be called within the fiscal year, and to conduct tender work according to guidelines.
It is necessary to obtain the nearest estimate for projects, so that projects can be managed without waste. It is also necessary to manage projects so that there is no waste of public funds and to submit the most accurate estimate for the projects. Estimates and calculations are to be based on the prevailing rate of the region, and extra or excess funds not used are to be estimated, calculated and returned.
It was found that when departments and organisations request expenditures, many indirect expenses, such as procurement of office materials and furniture were included, and there were more departmental expenses in project expenditures. As such, when expenditures are drawn up, departmental expenses are to be reduced as much as possible. As there are limitations in the budgets, the priority should be to include more project work expenses, and to use them effectively. And it is important for the expenditures to be for work that can be completed during the fiscal year. Furthermore, development policies set by the Union government are to be implemented by the departments, according to priorities.
Just as an ordinary person with common sense uses his or her own money appropriately, departments and organizations are to appropriately evaluate and utilize project work expenditures and departmental expenditures.
More expenditures were permitted to construct accommodations and housing for public servants during their service period and upon retirement. Project expenditures for reforestation to prevent natural disasters, reduce climate change, development of infrastructure, such as increasing generation of electricity, availability of potable water, irrigation water, transport and communications, were being provided as a priority and expenditure for the development of human resources, such as education, health and social benefits being increased.
In order to fulfill the first point of the union’s economic policy of ensuring that budget estimates and actual implementations are as accurate as possible, not only will union level departments and organizations, but state and region-level departments and organizations also need to be effectively managed.
The Finance Commission is to discuss and adopt the Union Budget estimate for FY 2018-2019 and Union Budget Bill for FY 2018-2019 so that it could be submitted to the Pyidaungsu Hluttaw, said the President.
Next, Finance Commission Vice-Chairman Vice-President U Myint Swe said the Union Budget estimate was based on provisional figures of FY 2017-2018. For capital expenditures, a project-wise feasibility study was conducted, and only expenditures for construction, procurement and other work that could be completed in the fiscal year were coordinated and drawn up by the project planning department and permitted.
Ks 50 billion was earmarked for capital expenditures by the Nay Pyi Taw Council, including for infrastructure as well as public servant housing construction. Departmental expenditures for office vehicles was reduced by allocating confiscated vehicles and, if this is not possible, through collective purchases. Luxury expenditures that are not related to production expenditures were reviewed and reduced, while office material and machinery expenditures were reviewed by comparing the situation in the past three years and permitted accordingly.
For the FY 2018-2019 (October to September) Budget, the income is Ks 20,051 billion, expenditures is Ks 24,954 billion, the deficit is 4,903 billion and the deficit to GDP ratio is 4.62 per cent.
The budget includes Ks 682 billion in foreign aid and Ks 2,191 billion in foreign loans. Ks 1,794 billion was supported from the Union fund to cover deficits of states and regions, which was also included in the total expenditure.
Also, an emergency fund of Ks 100 billion was included in the budget for responding to unforeseeable natural disasters. As per the National Natural Disaster Management Law, the State included Ks 20 billion for the National Natural Disaster Management Fund this year.
The Union Budget estimate for FY 2018-2019 and Union Budget Bill for FY 2018-2019 is being submitted to the Finance Commission so that it could review and approve it, according to the Vice President.
Afterwards, Finance Commission Vice-Chairman Vice-President U Henry Van Thio said that Ks 1,793.1 billion will be provided by the Union to the states and regions in FY 2018-2019. The budget prepared by the states and regions were Ks 1,065.632 billion in income, as well as Ks 2,858.732 billion in expenditures and a deficit of Ks 1,793.1 billion.
When the budget of the states and regions were reviewed, it was found that Ks 876.771 billion was earmarked for ordinary expenditures and Ks 1,972.161 billion for capital expenditures. The budget request was found to consist of 31 per cent ordinary expenditures and 69 per cent capital expenditures. Close to 40 per cent, the majority of the ordinary expenditure, was found to be for salaries and wages, while the second largest ordinary expenditure of 30 per cent was found to be for maintenance and repair. The remaining 30 per cent is for travel, material purchases, service expenses, education and social expenses, pensions, expenses for irrigation and rural development.
Further, 36 per cent of the capital expenditure was found to be for road and bridge construction, while 38 per cent is set aside for rural roads, water supplies and other regional development work. Also, 16 per cent is for office and public servant housing construction and 10 per cent for procurement of office materials, furniture and vehicles.
Ks 545.373 million expenditure for FY 2018-2019 was requested by the Ayeyawady Region government to cover their one year fuel, lubricant, maintenance expenses and staff allowances for river crossing ferries operated to assist in the transport of goods and people across the river because of the collapse of the Myaungmya Suspension Bridge. As this amount was requested after the union fund to support the states and regions in FY 2018-2019 was already submitted to the Union Government office, the total Union fund allocated to support the states and regions would increase to Ks 1,793.645 billion.
The budget estimate drawn up and provided by states and regions for FY 2018-2019 is submitted to the Financial Commission for discussion and approval, said the Vice President.
Finance Commission secretary Union Minister for Planning and Finance U Soe Win explained about the Union Budget estimate for FY 2018-2019 and Union Budget Bill for FY 2018-2019.
This was followed by the Nay Pyi Taw Council Chairman and Chief Ministers of states and regions discussing their support of the Union Budget estimate for FY 2018-2019 and Union Budget Bill for FY 2018-2019.
State Counsellor Daw Aung San Suu Kyi emphasized about the importance of not using the minimum amount, but to use the funding for the maximum benefit. For implementing sub-standard projects with the sole purpose of reducing expenses, it will not be beneficial for the country, in the long run. The work conducted should not be affected by reducing costs in required areas. Using less money is not the main point. The main point is to use the money for the greatest benefit of the country.

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