Disbursement of public funds sped up to fuel growth

In a report to the Government in early February, Minister of Planning and Investment Nguyen Chi Dung said that an estimated VND452.41 trillion (US$19.6 billion) in investment capital was disbursed last year from the State budget, equivalent to 96.13% of the target set by the Prime Minister. 2019 disbursement, meanwhile, was equal to just 73.7% and 76.75% of the figures targeted by the National Assembly and the Prime Minister.

The 2020 rate was the highest for many years, he said, describing it as the “sweet fruit” of breakthrough efforts by the Government, ministries, sectors, and localities to promote the disbursement of public funds.

Disbursed capital was about VND15 trillion in January, or 3.25% of the VND461.3 trillion planned for the year by the Prime Minister.

The disbursement pace was slower than expected but still much higher than the 0.95% recorded in January last year, according to the Ministry of Planning and Investment (MPI).

It noted that, to accelerate disbursement, the allocation of State budget-sourced investment capital has been promoted since late 2020.

As a result, over VND412 trillion of planned capital had been assigned as of the end of January, equivalent to 89% of the PM’s target, the MPI said.

While this is considered a positive figure, MPI is still concerned that the sum unallocated is relatively large, at more than VND101 trillion.

It pointed out that the 2021 public investment plan has been carried out while the medium-term public investment plan for 2021-2025 has yet to be approved.

Therefore, new projects with investment procedures completed after December 31, 2020, will be assigned capital at a later date, after the new National Assembly in the 15th tenure passes the 2021-2025 plan.

After the week-long Lunar New Year (Tet) holiday in mid-February, major projects, especially in the transport sector, have seen their progress and capital disbursement hastened.

At a recent meeting, Prime Minister Nguyen Xuan Phuc repeated his request for drastic action from the outset, to avoid disbursement pressure in the year-end period.

The newspaper cited Minister Dung as saying that it is necessary to prepare monthly and quarterly plans so as to disburse 90% of the sum planned for 2021 by the fourth quarter.

Specific organisations and inpiduals would then be held responsible for the implementation and disbursement progress of each project, he added.

The Government has also agreed on the establishment of a special working group for addressing obstacles to investment, production, and business projects, which is also believed to help with public investment disbursement and, subsequently, economic growth this year.