Low disbursement rate reduces efficiency of public investment capital

VCN - According to Minister of Planning and Investment Nguyen Chi Dung, the low disbursement rate reduces the efficiency of using public investment capital, wastes resources, and at the same time, may cause loss of economic driving force.
State Treasury implements solutions to speed up public investment capital disbursement State Treasury implements solutions to speed up public investment capital disbursement
FDI disbursement climbs to US$11.58 billion in January-August FDI disbursement climbs to US$11.58 billion in January-August
FDI disbursement rises 2 percent in first eight months FDI disbursement rises 2 percent in first eight months
Low disbursement rate reduces efficiency of public investment capital
Due to the impact of the pandemic, the realized investment capital of Ho Chi Minh City in July 2021 was estimated at 3.2% compared to the 2021 plan, down 67.5% year on year. Photo: Internet.

Referring to the cause of the delay in disbursement of public investment capital, the General Statistics Office revealed that under social distancing, many projects had to suspend operations due to unsafe health conditions for workers in disease prevention as well as must implement social distancing on the construction site. This is considered the main reason affecting the implementation progress of public investment projects in July 2021.

Specifically, investment capital made from the state budget of 19 southern localities implementing social distancing in July 2021 was estimated at VND11.7 trillion, accounting for 30.6% of total capital and down 26.6 % over the same period last year (July 2020 reached nearly VND16 trillion, accounting for 30.6% of total capital).

In particular, the investment capital plan from the allocated state budget of Ho Chi Minh City in 2021 reached VND35.7 trillion, accounting for 7.51% of the country's capital plan. However, due to the impact of the pandemic, the realized investment capital of Ho Chi Minh City in July 2021 was estimated at 3.2% compared to the plan in 2021, down 67.5% compared to the same period last year.

In addition, there are still a number of shortcomings, limitations and subjective points that cannot be completely overcome such as: site clearance, quality of planning, preparation of public investment projects, and choice of contractors, completing investment procedures, capacity in appraisal, inspection, supervision and construction.

Moreover, legal institutions on public investment and construction have not been adjusted to keep up with practical requirements and regulations. The decision on ODA capital source must also depend on the donor's regulations, causing delays in the implementation and disbursement of this capital.

Especially, the sudden increase in the price of construction materials in recent years also affects the implementation progress of public investment capital.

Soon complete legal framework

According to economic expert Le Dang Doanh, in the current context, public investment still plays an important role in economic growth, so more attention must be paid to speeding up of public investment disbursement. However, to achieve the stated goal, a series of measures must be rolled out which especially focus on the improvement of the legal framework related to the Land Law and the Law on Public Investment related to land. Because if there are too many gaps between the land prices of the State and the market price, it will hinder site clearance and completion of public investment projects on schedule. In particular, the lack of a legal framework will also make it difficult to attract potential investors to participate in public investment projects.

“Therefore, it is necessary to soon complete the legal framework related to land, in order to overcome the risks for public investment projects related to land. In addition, it is high time to review and complete the Law on Public Investment to adapt to the rapid and strong development of the Industrial Revolution 4.0 with the rise of the digital economy, e-commerce, and online payment. All of that requires the legal framework on public investment to be clear, transperant and synchronized to attract investors,” Dr. Le Dang Doanh said.

Regarding this issue, Deputy Minister of Planning and Investment Tran Quoc Phuong said that in August 2021, the Ministry has received proposals from a number of ministries, sectors and localities on the plan and will synthesize and report to the Prime Minister. By September 30, the Ministry will complete an overall report for the Government and the Prime Minister on the disbursement results. At the same time, the Ministry also makes adjustments to relocate the capital in accordance with the needs and conditions in different localities and then report to the Minister.

Accordingly, localities and branches with additional demands will be considered based on the number with no needs or lower capital demands. This year, this adjustment must be reported to the National Assembly Standing Committee which depends heavily on high rate disbursing units, and will have to be considered in practice in order to issue a harmonious and timely adjustment.

Generally, in the first seven months of 2021, the total capital allocated and assigned by ministries, central agencies and localities to projects that meet all investment procedures and are eligible for disbursement will reached VND398.6 trillion, equal to 86.4% of the assigned capital plan. By July 31, 2021, disbursed state budget capital reached VND169.3 trillion, equaling 36.7% of the plan, down 40.67% over the same period in 2020.

Besides a number of ministries and localities with the high ratio capital disbursement from the state budget, there are still seven ministries and central agencies that have not yet disbursed capital plans and there are two ministries and central agencies with a disbursement rate of less than 1%.

By Xuan Thao/Minh Phuong

Related News

Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
"One law amending four laws" on investment to decentralize and ease business challenges

"One law amending four laws" on investment to decentralize and ease business challenges

VCN - According to the Government, the draft Law amending and supplementing certain provisions of the Planning Law, Investment Law, Law on Investment under Public-Private Partnerships (PPP), and Bidding Law (referred to as "One law amending four laws") focuses on amending conflicting regulations that are causing obstacles, to facilitate investment, production, and business activities.
Removing difficulties in public investment disbursement

Removing difficulties in public investment disbursement

VCN - According to the report of the Investment Department (Ministry of Finance), the estimated disbursement from the beginning of the year to October 31, 2024 is VND 355,616.1 billion, reaching 47.43% of the 2024 plan, reaching 52.29% of the plan assigned by the Prime Minister.
Vietnam

Vietnam's economy is recovering well

VCN - According to Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR), by the end of the third quarter of this year, Vietnam's economy had recovered relatively well amid optimism about the overall growth of the world economy in late 2024 and 2025.

Latest News

M&A activities show signs of recovery

M&A activities show signs of recovery

Mergers and acquisitions (M&A) activities in Vietnam have been showing signs of recovery in recent months as several large companies announced finished deals, which may create a ripple effect in the M&A market.
Fiscal policy needs to return to normal state in new period

Fiscal policy needs to return to normal state in new period

VCN - To recover the economy during and after the Covid-19 pandemic, fiscal policy has been flexibly and promptly managed, becoming a solid foundation to help businesses and the economy gradually overcome difficulties. After nearly 5 years, although there are still difficulties, the economy is gradually returning to a high growth trajectory. In that context, it is necessary to let fiscal policy return to normal state.
Ensuring national public debt safety in 2024

Ensuring national public debt safety in 2024

VCN - Since the beginning of the year, public debt management has been conducted proactively and effectively, meeting the need of raising capital for development investment. At the same time, debt indicators by the end of 2024 are guaranteed within the ceiling and safety threshold approved by the National Assembly, ensuring national financial security, increasing proactive response to risks arising from external and internal causes of the economy.
Removing many bottlenecks in regular spending to purchase assets and equipment

Removing many bottlenecks in regular spending to purchase assets and equipment

VCN - Decree No. 138/2024/ND-CP, which has just been issued, is expected to contribute to resolving bottlenecks in allocating funds for purchasing assets and equipment; renovating, upgrading, expanding, and constructing new construction items in projects that have been invested in and constructed in the past.

More News

Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3.92%.
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

VCN - Discussing in groups about the project "1 law amending 7 laws" in the financial sector according to the program of the 8th Session on October 29, 2024, National Assembly delegates proposed that the Government should be assigned to make specific regulations on decentralization, granting the right to exempt and reduce taxes, and handling penalties for late payment of taxes...
State-owned commercial banking sector performs optimistic growth, but more capital in need

State-owned commercial banking sector performs optimistic growth, but more capital in need

VCN - According to the report sent to the National Assembly before the 8th Session of the Government on investment, management and use of state capital in enterprises nationwide in 2023, the business performance of the state-owned commercial banking sector achieved positive growth.
Stipulate implementation of centralized bilateral payments of the State Treasury at banks

Stipulate implementation of centralized bilateral payments of the State Treasury at banks

VCN - The Ministry of Finance (MOF) gathers feedback on the draft Circular regulating the management and use of accounts of the State Treasury opened at the State Bank of Vietnam (SBV) and commercial banks.
Rush to finalize draft decree on public asset restructuring

Rush to finalize draft decree on public asset restructuring

VCN - According to the Ministry of Finance, the draft Decree regulating the rearrangement and handling of public assets is being urgently completed by the Ministry of Finance to submit to the Government for promulgation.
Inspection report on gold trading activities being complied: SBV

Inspection report on gold trading activities being complied: SBV

The State Bank of Vietnam (SBV) has announced that inspections on compliance with legal policies in gold trading activities of credit institutions and gold trading businesses have been completed and an inspection report is being compiled.
Budget revenue in 2024 is estimated to exceed the estimate by 10.1%

Budget revenue in 2024 is estimated to exceed the estimate by 10.1%

VCN -The Government estimates that state budget revenue in 2024 will exceed VND 172.3 trillion, up 10.1% over the estimate, of which tax and fee revenue will reach 13.1% of GDP.
Ensure timely and effective management and use of public asset

Ensure timely and effective management and use of public asset

VCN – In order to promptly and effectively implement public asset management and use, ensuring compliance with legal regulations, the Ministry of Finance has just issued an official dispatch requesting ministries, branches and localities to comply with regulations in the Government’s Decree No. 114/2024/ND-CP dated September 15, 2024.
Accelerating decentralization in public asset management

Accelerating decentralization in public asset management

VCN - Amending the Law on Management and Use of Public Assets aims to improve regulations on accelerating decentralization and improving efficiency in management and use of public assets, and promoting financial resources, ensuring that the unified application the Law on Management and Use of Public Assets and other legal documents.
Read More

Your care

Latest Most read
M&A activities show signs of recovery

M&A activities show signs of recovery

Mergers and acquisitions (M&A) activities in Vietnam have been showing signs of recovery in recent months as several large companies announced finished deals, which may create a ripple effect in the M&A market.
Fiscal policy needs to return to normal state in new period

Fiscal policy needs to return to normal state in new period

VCN - To recover the economy during and after the Covid-19 pandemic, fiscal policy has been flexibly and promptly managed, becoming a solid foundation to help businesses and the economy gradually overcome difficulties. After nearly 5 years, although there
Ensuring national public debt safety in 2024

Ensuring national public debt safety in 2024

VCN - Since the beginning of the year, public debt management has been conducted proactively and effectively, meeting the need of raising capital for development investment. At the same time, debt indicators by the end of 2024 are guaranteed within the ce
Removing many bottlenecks in regular spending to purchase assets and equipment

Removing many bottlenecks in regular spending to purchase assets and equipment

Decree No. 138/2024/ND-CP, which has just been issued, is expected to contribute to resolving bottlenecks in allocating funds for purchasing assets and equipment
Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
Mobile Version