Directive No. 15/2003/CT-TTg On the Development Plan for Economic and Social Growth and State Budget Estimate for 2004

DIRECTIVE

Regarding the development of plans for economic and social development and

State budget for 2004

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Implementation of Resolution No. 09/2002/QHXI on the state budget estimate and Resolution No. 14/2002/QHXI on tasks for 2003 of the National Assembly, the Government has issued many mechanisms and policies and focused on directing ministries, central agencies, and localities to mobilize all resources, promptly address and resolve difficulties, boost agricultural, industrial production, develop service activities, promote exports, implement measures to reduce costs to enhance the competitiveness of each product and the entire economy; accelerate the progress of investment projects, develop social and cultural aspects; initially restore order in some areas such as transportation, public security, timely and effectively handle new issues arising from the SARS epidemic, maintain national defense and security.

Although we had to face some difficulties in the first months of 2003, the economic and social situation still maintained a relatively good development capacity; GDP in the first quarter increased by 6.9%, with a forecast that the second quarter will continue to develop positively.

However, the situation both domestically and internationally in the coming period, while there are favorable conditions that can be utilized and promoted, also interweaves with significant challenges, especially new difficulties arising from the impact of the Iraq War which was not fully anticipated, the SARS epidemic, and in addition, the rainy season is approaching, weather patterns are becoming increasingly complex...

The Prime Minister requests ministries, central agencies, provinces, and centrally-administered cities to leverage creativity, dynamism, overcome difficulties and challenges, effectively implement the solutions for economic and social development in 2003 as proposed in Resolution No. 02/2003/NQ-CP dated January 17, 2003 of the Government on major policies and measures to focus on directing the implementation of economic and social development tasks in 2003 and resolutions of regular meetings of the Government in 2003; strive to successfully complete the National Assembly's Resolutions on tasks and state budget estimates for 2003, while developing plans for economic and social development and the state budget estimate for 2004 with the following main requirements and contents:

I. CONTENT OF THE MAIN TASKS OF THE PLAN FOR 2004

1. Objectives and main tasks of the plan for 2004:

The year 2004 is very important for completing the goals of the five-year plan. The Prime Minister requests ministries, central agencies, and localities to focus on implementing the following main objectives and tasks:

a) Strive to achieve an economic growth rate (GDP) of no less than 7.5%, with industry and construction increasing by 10-10.5%; services increasing by 7.2-7.5%; agriculture, forestry, and fisheries increasing by 3.9-4.2%. Create necessary conditions for stable and sustainable economic development and achieve higher economic growth rates in 2005.

b) Urgently review approved planning schemes, particularly those related to product development. Continue to shift production structures, utilizing the strengths of each region, linking production with consumption markets. Develop products with high competitive advantages, limit those with low competitiveness or requiring high protection. Continue to implement programs to reduce production costs, gradually eliminate unreasonable costs, contributing to enhancing the competitiveness of products.

c) Adopt appropriate policies to increase domestic savings, mobilizing over 35% of GDP for development investment; strive for total state budget revenue to reach 20-21% of GDP; effectively implement the amended State Budget Law; increase spending on education and training, healthcare, science and technology, social policies, and poverty reduction.

Reduce bad debts and overdue debts, improve the quality of banking services.

d) Enhance the effectiveness of foreign economic activities, boost exports, and seek new markets. Create favorable conditions to attract more foreign direct investment; disburse and utilize official development assistance (ODA) funds efficiently. Continue to implement the accession roadmap to AFTA and multilateral and bilateral commitments in the process of international economic integration.

đ) Continue to innovate, fundamentally and comprehensively transform the development of science and technology; education and training; vocational education systems; improve the quality of human resources with a reasonable structure. Promote the application of advanced technologies in production and business; strengthen environmental protection efforts.

e) Effectively address pressing social issues; accelerate the progress of poverty reduction, employment, and Program 135 targets. Continue to focus on investing in economic and social development in six difficult mountainous provinces in the north, economic and social development in the Central Highlands and the Mekong Delta region.

ưg) Accelerate administrative reform, perfect administrative systems, consolidate organizational structures, build and enhance the capabilities of civil servants, and reform public finance. Increase the effectiveness and transparency of state policies.

h) Continue to strengthen national defense and security, combine national defense and security with economic and social development; continue to combat organized criminal activities and ensure social order and discipline.

2. Tasks for building the state budget estimate for 2004:

The year 2004 is the first year to implement the amended State Budget Law passed by the 11th National Assembly at its second session on December 16, 2002, and also the year to implement the Law Amending and Supplementing Certain Provisions of the Value Added Tax Law; the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law; and the Enterprise Income Tax Law (amended). Therefore, it is required that all levels and sectors thoroughly understand and implement these laws correctly.

The basic objectives of the state budget estimate for 2004 are: implementing reasonable mobilization policies to ensure resources for carrying out tasks related to economic and social development, national defense, and security; promoting the internal strength of sectors and localities, concentrating capital and funds to implement important national tasks; distributing and using funds according to objectives, economically, effectively, preventing waste and loss, and improving the health of the state budget to contribute to rapid and sustainable economic growth, maintaining political stability, and social order and safety.

The tasks of building the state budget estimate for 2004 are:

a) The state budget revenue estimate must be built based on accurately calculating all revenue items as prescribed by law and analyzing and forecasting factors such as economic growth, market conditions, prices, etc.; fully implementing regulations encouraging production and business, increasing exports, expanding markets; implementing commitments of the regional and global economic integration process; implementing measures to strengthen revenue management, manage value-added tax refunds, prevent revenue losses, smuggling, and commercial fraud.

Building the state budget revenue estimate with a mobilization effort target of 20-21% of GDP, including tax and fee revenues at 18-19% of GDP. The revenue estimates of ministries, central agencies, and localities (excluding oil revenues) must aim to increase by an average of over 10% compared to the actual level in 2003.

b) The state budget expenditure estimate focuses on implementing the following main tasks:

- The state budget investment expenditure estimate ensures sufficient capital for key national projects, prioritizing allocation of capital for projects under Program 135, School Reinforcement Program, settlement projects in hydropower reservoir areas, and the project to plant five million hectares of new forests. Continuing to allocate capital for implementing socio-economic development policies in the northern mountainous provinces, Central Highlands, and Mekong Delta; ensuring sufficient capital for investment preparation; allocating sufficient counterpart funds for ODA projects; continuing to allocate capital for rural transportation development, aquaculture infrastructure, village craft infrastructure, tourism infrastructure; supporting the production of important products, export support, structural adjustment of agricultural economy; supporting trade promotion activities, expanding market search, providing market information,...

- The state budget expenditure estimate for developing science and technology, education, training, culture, healthcare, and social affairs must ensure funding for implementing systems and policies in each field, sector, and region. Allocating the administrative and public service expenditure estimate at a reasonable level to promote the full and effective implementation of financial management mechanisms by self-financing public institutions according to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government. State administrative agencies proactively register to implement the mechanism of personnel quota and budget according to Decision No. 192/2001/QĐ-TTg dated December 17, 2001 of the Prime Minister.

- The state budget expenditure estimate for implementing national target programs must ensure progress and goals according to Decision No. 42/2002/QĐ-TTg dated March 19, 2002 of the Prime Minister.

- Continuing to implement salary reform to create motivation for economic and social development, and administrative reform. Ministries, central agencies, localities, and budget-using units need to thoroughly understand the reform objectives, considering this as an important task of their agencies, units, and localities; implementing measures to generate sources for salary reform at each agency, unit, and budget level from retained revenue (at least 40%, except for the health sector which is at least 35%), from increased revenue (at least 50%), and from regular expenditure savings excluding salaries and salary-like allowances (at least 10%).

- Allocating reserves and reserves according to the State Budget Law to proactively respond to natural disasters, floods, and handle urgent tasks.

State budget balance: implementing the principle that total tax, fee, and license revenue must exceed total regular expenditure, ensuring repayment of maturing debts, and accumulating for investment development.

The state budget deficit should not exceed 5% of GDP, consistent with domestic borrowing capacity and preferential foreign borrowing to cover the state budget deficit, without engaging in commercial foreign borrowing to cover the deficit.

d) Regarding the local state budget estimate:

2004 is the first year of the stable period of the state budget according to the amended State Budget Law, therefore localities need to closely adhere to the objectives and tasks of the state budget for 2004 mentioned above, fully implementing the provisions of the State Budget Law and guiding documents to build the 2004 state budget estimate. All sources of revenue and expenditure tasks of localities must be included in the local state budget balance. Among which, it is necessary to pay attention to the following issues:

- Building the state budget revenue estimate on the local territory: based on forecasting economic growth and revenue sources in 2004 for each industry, each field, each economic entity of each locality, and newly emerging revenue sources on the territory to accurately calculate each revenue field and each revenue item according to the system; the revenue estimate of each province and centrally-administered city includes all revenue sources on the commune, ward, town territory according to the State Budget Law.

- Building the local state budget expenditure estimate: must be based on the local socio-economic development tasks in 2004, current systems and policies, current expenditure standards, and the 2004 budget allocation decision of the Prime Minister; reasonably forecasting specific needs for each local state budget expenditure field; allocating reserves according to the State Budget Law; the local state budget expenditure estimate for 2004 by field includes the expenditure tasks of the commune, ward, town budget.

- Proactively calculating the source for implementing salary reform as stipulated in point b above.

- Proactively use the allocated budget to repay debts fully and on time for loans and funds raised to ensure the soundness of the local budget in accordance with the prescribed regulations.

- Develop the budget for expenditures to implement national target programs, Program 135, and the project to plant five million hectares of new forests (the portion implemented by the locality) based on specific objectives and tasks of each national target program as stipulated and the progress of the locality.

3. Tasks for building the investment development plan:

The investment development in 2004 shall ensure the following objectives:

Investment to serve and create conditions for the process of restructuring the economy towards efficiency and leveraging the advantages of each region, sector, and product; rapidly enhance the competitiveness of the economy.

Continue to invest in the infrastructure of transportation, postal services, irrigation systems, rural infrastructure, tourism infrastructure, environmental protection, disaster prevention, mitigation, and reduction; focus on developing education, training, science and technology, healthcare, and social welfare.

Invest in essential infrastructure for poor communes (outside Program 135) under the national target program to eliminate hunger, reduce poverty, and create jobs; support investment in difficult areas; implement national target programs...

To achieve these objectives, ministries, sectors, localities, and State-owned enterprises 91 need to implement measures to mobilize all sources of investment capital for comprehensive social development to be allocated to each sector, field, and locality.

Based on the basic objectives mentioned above, the investment development plans of ministries, sectors, localities, and State-owned enterprises 91 must meet the following requirements:

The investment development plan for 2004 of central ministries, agencies, localities, and State-owned enterprises 91 must include all sources of capital: state budget capital, state credit capital, state enterprise investment capital, investment capital mobilized from the private sector and individuals, foreign direct investment capital, and other mobilized sources.

Central budget capital should first be balanced for important national projects, ongoing projects; projects that can be completed in 2004; sufficient counterpart funds for ODA projects to quickly disburse ODA funds; national target programs, Program 135. Adequate funding must be allocated for planning work and investment preparation.

For the investment development plan of provinces and centrally-administered cities.

The investment development plan of provinces and centrally-administered cities must reflect all sources of capital in the entire society; maximize resource mobilization for development investment, ensuring that the growth rate of investment capital in 2004 is higher than the plan for 2003.

In balancing development investment capital from the local budget, localities need to allocate an appropriate proportion for development investment according to the principle of ensuring that the growth rate of development investment expenditure is higher than the growth rate of regular expenditure and higher than the growth rate of local budget revenue.

Investment capital returned to localities must have a plan for immediate use at the beginning of the year in accordance with the objectives and beneficiaries such as: (1) Revenue from agricultural land tax usage fees shall only be used to invest in agricultural infrastructure projects, mainly irrigation works; (2) Capital from land use rights transfer fees and land rental fees shall be used to invest in infrastructure projects including transportation, electricity supply, water supply, postal services... (3) Capital from the sale of state-owned housing shall be used to invest in housing development and housing funds; (4) Revenue from lottery activities shall be concentrated for investment in projects and programs in the fields of education and healthcare; (5) Resource taxes shall be used to invest in infrastructure within the scope affected by resource exploitation.

Investment capital from the central government budget shall only support provinces and centrally-administered cities with low annual state budget revenues and unable to adjust for the central government budget. Projects in supported fields with objectives from the central government budget for the local budget include:

- A portion of export tax and import tax revenue collected from border gates shall be reinvested in border gate infrastructure construction: transportation, drainage and water supply systems, commercial warehouses, inspection stations, quarantine stations, trade promotion centers, medical centers;

- Investment capital from television advertising revenue shall be used to invest in television system projects, including coverage of remote and difficult areas;

- Direct support capital from the central government budget for local budgets for investment includes national target programs, Program 135, and other target programs decided by the Prime Minister (investment in tourism infrastructure, village craft infrastructure, aquaculture infrastructure, flood control and distribution programs, border management roads); other infrastructure projects.

II. PROGRESS IN BUILDING THE PLAN AND ASSIGNMENT OF IMPLEMENTATION

1. Regarding the progress in developing plans:

At the beginning of June 2003, the Ministry of Planning and Investment and the Ministry of Finance issued guidelines for the framework of the state budget plan for 2004 for central ministries, agencies, localities, and State-owned enterprises 91 as a basis for building the plan.

In June and July 2003, central ministries, agencies, localities, and State-owned enterprises 91 developed the economic and social development plan and the state budget estimate for 2004 and reported to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and submission to the Government before July 25, 2003.

(Central ministries and agencies submit before July 20, 2003).

In August 2003, the Ministry of Planning and Investment and the Ministry of Finance consolidated the economic and social development plan and the state budget for 2004, while proposing allocation schemes for plan indicators and the budget.

In September 2003, the Ministry of Planning and Investment and the Ministry of Finance reported to the Government the economic and social development plan and the state budget for 2004.

Before November 20, 2003, the Prime Minister assigns the plan for economic and social development and the state budget estimate for 2004 to ministries, central agencies, localities, and State-owned Enterprise 91 based on the resolutions of the National Assembly regarding the state budget estimate and tasks for 2004.

Before November 25, 2003, the Ministry of Planning and Investment and the Ministry of Finance provide detailed guidance to ministries, central agencies, localities, and State-owned Enterprise 91.

Before December 10, 2003, ministries, central agencies, and localities complete the allocation of plans and state budget estimates to lower levels based on the tasks assigned by the Prime Minister and the guidance of the Ministry of Planning and Investment and the Ministry of Finance.

2. Regarding division of responsibilities:

- By January 2006, submit to the Prime Minister a draft list of particularly important state-owned companies directly implementing some rights and obligations of the state owner by the Prime Minister;

Take the lead and coordinate with the Ministry of Finance to calculate and develop various scenarios and major balances as a basis for guiding ministries, central agencies, and localities in building the 2004 plan.

Organize guidance on the construction and consolidation of the 2004 economic and social development plan.

Take the lead and coordinate with the Ministry of Finance to forecast the investment development plan and prepare a distribution scheme for investment expenditures according to the assigned sectors, to be sent to the Ministry of Finance before September 15, 2003; consolidate the distribution scheme for the state budget estimate for the national target program (construction investment component).

Work with ministries, central agencies, and localities on the 2004 economic and social development plan.

b) The Ministry of Finance:

Guide ministries, central agencies, and localities in evaluating the implementation of the state budget estimate for 2003; prepare a rough estimate of the state budget and notify the review figures for the state budget revenue and expenditure estimate for 2004 to ministries, central agencies, and localities.

Take the lead and coordinate with the Ministry of Planning and Investment and relevant agencies to consolidate and prepare the state budget estimate and the central budget distribution plan for 2004; work with ministries, central agencies, and localities on the state budget estimate.

c) Ministries, state agencies, and State-owned enterprises 91:

Coordinate with the Ministry of Planning and Investment and the Ministry of Finance to develop economic and social development tasks and state budget estimates within their respective areas of responsibility.

Ministries managing national target programs and the 5 million hectare forest project cooperate with the Ministry of Planning and Investment and the Ministry of Finance to work with ministries, central agencies, and related localities on tasks and financial estimates for 2004 concerning national target programs and the 5 million hectare forest project within their areas of responsibility, to be submitted to the Ministry of Finance and the Ministry of Planning and Investment before August 15, 2003.

Ministries and state agencies, based on their functions, and considering available resources, build socio-economic indicators, propose solutions, new mechanisms, policies, and systems, or suggest amendments and supplements to existing policies and systems as a basis for developing plans and state budget estimates, and notify the Ministry of Planning and Investment, the Ministry of Finance, and relevant ministries and agencies before the preparation of the state budget estimate.

d) People's Committees of provinces and centrally-administered cities.

Guide, organize, and direct the Provincial Departments of Planning and Investment and Provincial Departments of Finance and Prices to closely cooperate with other provincial departments and sectors in building the economic and social development plan and the state budget estimate to be submitted to the competent authority for decision-making.

The Prime Minister requests ministers, heads of ministerial-level agencies; heads of government agencies, chairpersons of provincial people's committees, and chairpersons of the boards of directors of State-owned Enterprise 91 to implement this Directive./.