Reigns tightening on disbursement of public investment capital

VCN - According to Assoc. Prof.Dr. Dinh Trong Thinh, Senior Lecturer of the Academy of Finance, “in order to carry out public investment effectively, discipline must be improved from the very beginning and there must be a smooth coordination of all relevant ministries, departments and agencies.”
Assoc. Prof.Dr. Dinh Trong Thinh
Assoc. Prof.Dr. Dinh Trong Thinh

Currently, the disbursal rate of public investment is still quite low, especially when there are only a few days left until the end of 2021. But what is the cause of this situation?

In 2021, the disbursal of public investment capital has been strongly affected by the Covid-19 pandemic due to its effects on raw materials and labor.

Moreover, although inflation in Vietnam seems to be "a bit far away", the "spectre" of inflation is increasing more seriously in the world. Vietnam has not been the only one to focus on promoting public investment to stimulate the economy, many countries have also chosen this direction, so the scarcity of raw materials will also increase. Production stagnates when inflation is high and this is expected to be a common problem that the world has to cope with. Considering Vietnamese products have to depend on importing material from aboard, for both infrastructure projects and production of the private and public sectors, this should be taken into account to cope with escalating prices. This has affected the disbursal rate of investment capital in the past.

In fact, some localities with low disbursal rates are asking to return capital or move capital to 2022 for further implementation. But is this reasonable?

In fact, public investment activities have many unreasonable and careless problems. Many localities, departments and sectors have established projects and developed programs to make investments based on their feelings and limited scientific and practical knowledge. As a consequence, project formulation is sketchy.

The fluctuation of raw material prices also caused the stagnation of some projects due to fear of loss of capital. The problem is working out how to get the trans-shipment capital of projects accrued in previous years to "cover" a new sudden increase in price, so as not to be forced to calculate excessive capital, as has been seen in the slow progress of previous public investment projects. This requires ministries, sectors and local governments to carefully calculate as soon as they receive the capital allocation plan.

How can the disbursal of public investment capital in 2022 reduce difficulties and problems that arose in the past?

In the near future, we need to limit the spread of investment and consider cutting unnecessary projects to focus investment capital on a number of important projects. We will need to deploy operations quickly, promoting efficiency for the economy. Along with that, it is necessary to control the number of investment projects. When launching any project, that project must be really essential and have a long-term positive impact. In order to solve these inadequacies, we must tighten the discipline of building investment projects and set up a preliminary project. The preliminary project must then be strictly inspected and supervised. State management agencies must check, monitor and balance the economy's resources with the needs and capabilities of investment activities.

To promote disbursal results, it is necessary to coordinate with many sectors. Accordingly, we need to quickly shorten unnecessary procedures using the funding allotted, and improve the role of management agencies in bidding activities, to avoid the situation of impractical implementation.

In addition, the responsibility and role of heads of authorities and sectors must be made clear from the planning stages to inspection, supervision and assessment. At the same time, we must clearly define the responsibilities of local governments, ministries and sectors so that agencies can coordinate with each other closely, helping investors and contractors to carry out their plans.

By Bảo Minh/Thanh Thuy

Related News

Striving for revenue to rise by over 15% compared to assigned estimate

Striving for revenue to rise by over 15% compared to assigned estimate

VCN – At meeting on summarizing in financial budget October and deploying work program in November held by the Ministry of Finance on November 11, Deputy Minister of Finance Cao Anh Tuan requested to speed ​​up review budget work and quickly remove financial institutional bottlenecks.
Public investment spending up 1.8% in first 10 months of 2024

Public investment spending up 1.8% in first 10 months of 2024

VCN - Public investment from Vietnam’s state budget saw steady growth in the first ten months of 2024, reaching 64.3% of the annual target—an increase of 1.8% compared to the same period last year.
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.
Managing price effectively, reducing pressure on inflation

Managing price effectively, reducing pressure on inflation

VCN - Timely and effective price management helps control the consumer price index (CPI) and inflation in accordance with the set target.

Latest News

Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN – In order to achieve goal of strictly managing public debt and maintaining security and safety of the national financial system in 2025, it is necessary to ensure the borrowings and repayments of public debts is within the approved estimate; closely monitor public debt indicators to ensure that they are within the ceiling and warning thresholds approved by the National Assembly.
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

VCN - On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws. Concluding the session, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized the need for the Government to direct the drafting body and relevant agencies to collaborate closely to finalize a persuasive and widely supported report, ensuring the quality of the draft law for the National Assembly's consideration and decision.

More News

Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

VCN - According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
State-owned securities company trails competitors

State-owned securities company trails competitors

Contrary to the outstanding performances in the banking sector, the securities subsidiaries of major banks have yet to fully leverage their potential, despite numerous inherent advantages.
Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
U.S. Treasury continues to affirm Vietnam does not manipulate currency

U.S. Treasury continues to affirm Vietnam does not manipulate currency

VCN - In its latest report, the U.S. Department of the Treasury has positively assessed Vietnam's monetary policy, reaffirming that Vietnam does not engage in currency manipulation.
Exchange rate fluctuations bring huge profits to many banks

Exchange rate fluctuations bring huge profits to many banks

Net profits from the foreign exchange trading segment of many banks have gained positive results thanks to a strong USD/VNĐ exchange rate fluctuations this year.
A “picture” of bank profits in the first nine months of 2024

A “picture” of bank profits in the first nine months of 2024

VCN - Pre-tax profits for banks during the first nine months of 2024 remained positive, exceeding 200 trillion VND, solidifying the sector's position as a market leader.
Many challenges in restructuring public finance

Many challenges in restructuring public finance

VCN - Restructuring public finance is an important step to improve state financial management, ensure resources are allocated reasonably and effectively, contributing to the country's sustainable development. In addition to the achieved results, the process of accelerating public finance restructuring also faces many pressures.
Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

VCN - E-commerce platforms that declare and pay taxes on behalf of traders not only help to reduce the number of tax declaration points but also reduce the cost of compliance with administrative procedures for the whole society because only one point as the e-commerce trading platform implements tax deduction, payment and declaration on behalf of tens, hundreds of thousands of individuals and business households on the platform.
Disbursement of public investment must be accelerated: Deputy PM

Disbursement of public investment must be accelerated: Deputy PM

Deputy Prime Minister Ho Duc Phoc has called on ministries, agencies, and localities to accelerate the disbursement of public investment from now until the year-end and further tighten investment management.
Read More

Your care

Latest Most read
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN - According to the plan for borrowing and repaying public debt and foreign debt of the country in 2025, the total borrowing demand of the Government in the year is expected to be at VND 815,238 billion, an increase of 20.6% compared to the Government'
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws.
Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
Mobile Version