Directive No. 409/TTg on the development plan for economic and social progress and state budget estimate for 1996

DIRECTIVE

Regarding the development of the socio-economic plan and the state budget estimate for 1996

Implementing the Resolution of the National Assembly, Ninth Session, Sixth Meeting (October 1994) on the tasks for 1995, all sectors, levels, and grassroots units nationwide have made great efforts to achieve many important results in implementing the set goals: Through the results of the first six months of 1995, production maintained a relatively high growth rate; foreign economic relations developed further; many aspects of society showed positive changes; people's living standards were gradually stabilized and improved. However, significant difficulties still exist, notably: The state budget remains strained due to low revenue collection, widespread tax evasion, large budget deficits; investment capital for basic construction through the budget and credit are very low; inflation remains at a high level; smuggling is still prevalent.

The Prime Minister requests that ministries, sectors, and localities implement several matters to strive to achieve and exceed the 1995 plan targets; develop and consolidate the 1996 plan according to the following contents:

I. MANAGEMENT AND EVALUATION OF THE IMPLEMENTATION OF THE 1995 PLAN

1. Management of the implementation of the 1995 plan:

- The State Planning Commission shall coordinate with the Ministry of Finance and relevant sectors to review the major balances of the economy, ensuring sufficient materials, raw materials, and fuel for production, tapping into product consumption markets; focusing on directing units to fully exploit their production capacity, increase output, reduce costs, and lower production costs...

- Strengthen inspection, supervision, and anti-tax evasion measures, combat smuggling. Urge units to pay off all outstanding revenues from 1994 and the first six months of 1995 into the state budget. By all means, strive to complete the revenue tasks approved by the National Assembly and assigned by the Prime Minister to ministries, sectors, and localities.

- People's Committees of provinces and centrally-administered cities shall direct statistical reviews of land funds in each commune and ward, inspect the use of land and houses belonging to public assets in central and local units within their jurisdictions. On this basis, implement the transfer of land use rights and allocation of land simultaneously with the sale of state-owned houses according to regulations, striving to achieve and exceed the revenue targets from these sources to provide additional funds for infrastructure construction. Ministries, sectors, and People's Committees of provinces and centrally-administered cities must strictly implement the Prime Minister's Directive on the reorganization of administrative and public service offices; immediately implement policies to handle surplus office space or rented premises, especially in Hanoi and Ho Chi Minh City.

- The State Planning Commission and the Ministry of Finance shall coordinate with relevant ministries, sectors, and project leaders using foreign loans and aid to review progress, resolve obstacles, actively negotiate with external partners to accelerate capital withdrawal, and implement projects according to agreements and plans.

- Review construction projects, firmly cutting those that are not truly necessary such as building office buildings, conference halls, and projects lacking required investment procedures.

From now until the end of the year, no supplementary budget expenditures outside the plan will be approved except in cases of extreme necessity decided by the Prime Minister; ministries, sectors, localities, and units must practice thrift, rearrange expenditure tasks to ensure new essential needs; absolutely no decisions should be made without funding sources.

- Strictly implement thrift, anti-waste, anti-corruption, and anti-smuggling measures. Implement financial-monetary measures and market management to control inflation in the last six months of the year.

2. Evaluation of the implementation of the 1995 plan:

- Review the implementation of the National Assembly's Resolution on the 1995 tasks; evaluate the results of the plan, objectives, programs, and projects set for 1995, clearly identifying achievements and shortcomings, analyzing specific reasons, particularly reviewing progress and deficiencies in budget management and administration.

- Based on the estimated implementation of the 1995 plan, assess the socio-economic situation over the past five years (1991-1995), compare it with the five-year plan tasks and new requirements set by the mid-term National Congress of the Party. Focus on evaluating and analyzing progress and weaknesses in stabilizing and developing the economy, restructuring the economy towards industrialization and modernization, cultural and social development, national defense and security, maintaining public order; based on this, review the performance of state management functions, especially in institutional reform, policy-making, law enforcement, anti-corruption, and waste prevention, combating smuggling, and social evils. Draw lessons for planning and managing the 1996 plan and the 1996-2000 plan.

II. DEVELOPMENT OF THE SOCIO-ECONOMIC PLAN AND THE STATE BUDGET ESTIMATE FOR 1996

The five-year plan for 1996-2000 is being developed to present to the Eighth National Congress of the Party for approval of main tasks and goals aimed at successfully implementing the socio-economic stabilization and development strategy until 2000, as approved by the Seventh Congress, with an adjusted higher economic growth target according to the requirements of the new development stage.

The year 1996 marked the beginning of the five-year plan from 1996 to 2000, which focused on the task of increasing economic growth at a higher rate than the previous year, while consolidating political and economic, social stability, continuing to promote the renewal process, taking advantage of favorable opportunities and advantages to exploit and utilize domestic and foreign resources effectively; harmonizing economic growth with the resolution of urgent issues related to cultural, social development and national defense and security consolidation; maintaining a solid, healthy state budget balance with necessary reserves to be proactive in management.

1. The main tasks for the year 1996:

a) Continue to create a favorable environment and conditions for all economic sectors to fully develop their resources sustainably; achieve a relatively high and stable economic growth rate, promote structural transformation throughout the national economy and within each industry and region towards industrialization and modernization, closely linked to the implementation of a program to ensure solid economic and social stability. The expected target for the pace of economic growth in 1996 compared to 1995 is as follows:

- Gross Domestic Product (GDP) increases by 9.5-10%.

- Agricultural, forestry, and fishery production value increases by 4.3-4.5%.

- Industrial production value increases by 14-15%.

- Production value of service industries increases by 13-14%.

b) Strive to stabilize and significantly improve the national financial situation. Collect taxes and fees according to the law, comprehensively and thoroughly exploit all sources of revenue, prevent loss of revenue; ensure reasonable and frugal spending on regular needs, repay debts, and allocate more funds for development investment compared to previous years. At the same time, seize every opportunity to rapidly increase the attraction of official development assistance (ODA) funding, actively mobilize medium and long-term loans from the people at reasonable interest rates to have sources to offset the budget deficit. Stabilize and consolidate the purchasing power of the currency, implement comprehensive measures to control inflation at a level above and below 10%, enhance the ability to control inflation, and stabilize prices.

c) Vigorously develop foreign economic relations, focusing on exports, while replacing imports with domestically produced products that are effective, leveraging the comparative advantages of the entire country as well as each region, rapidly enhancing the competitiveness of goods and services, gradually meeting new requirements in cooperation and trade relations with countries in the ASEAN bloc, increasing export turnover by over 25% compared to 1995, ensuring sufficient import of essential materials, equipment, and necessary consumer goods for the economy, contributing to handling the money-goods relationship. Improve the investment environment to attract more ODA, FDI, and advanced technology from outside to serve the requirements of socio-economic development.

d) Supplement policies and apply various forms to mobilize all savings and self-investment development capabilities of the people and enterprises of all economic components to expand the scale of total social investment and improve the efficiency of investment fund utilization, bringing the total social investment capital to reach 26-27% of GDP.

đ) Effectively implement programs for cultural and social development using state, people's, and external aid funds; create new changes in education, training, culture, information, health, population, family planning, science and technology, and environmental work, employment, poverty reduction, increasing average income, and improving people's living standards.

e) Continue to comprehensively promote the renewal process, linking economic reform with administrative reform, enhancing the effectiveness and efficiency of the state apparatus.

g) Maintain political and social stability, creating a favorable environment for economic development; ensure the regular needs of armed forces, gradually develop the country's defensive capabilities, and maintain public order and safety.

Ministries, sectors, and localities need to thoroughly understand these tasks, clearly identify the position of the year 1996, compare it with the current status of their respective sectors and regions, delve deeply into investigations, calculations, and determination of all potential development resources that can be mobilized in the year to build plans that are truly accurate and highly effective.

2. Clarify the major balances of the whole country, of each locality, and the major balances of each Ministry assigned responsibility; especially the balances regarding the budget, basic construction investment funded by centralized state capital, the money-goods balance, and key materials and goods. The Prime Minister requests ministries and localities to focus on arranging some major balances:

a) The budget balance must ensure positivity and reality; all budget revenues and expenditures must be reflected in the state budget estimate and implemented through the State Treasury; the rate of increase in domestic tax and fee collection must be greater than the rate of increase in regular spending, gradually raising the proportion of developmental expenditure. The state budget estimate must ensure a solid balance with adequate reserves to be proactive in management, reducing the ratio of budget deficit to GDP.

- Deeply grasp the spirit of thrift, not evenly distributing investment capital, not allocating capital for non-urgent needs, limiting the purchase of unnecessary equipment; continue to suspend new office building construction, car purchases, and expensive interior furnishings; individual cases must be reviewed and decided by the Prime Minister.

- Allocate about 70% of taxes and fees for regular spending; prioritizing important economic and social tasks and national defense, protecting national sovereignty, public order, and social security.

- Ensure sufficient sources to settle all outstanding budget payments from previous years.

- Budget reserves must be allocated adequately to meet the requirements for implementing new policies, unexpected expenses, and setting aside a portion for next year's reserve.

- The state budget deficit must correspond to the capacity for domestic medium and long-term borrowing and feasible foreign concessional borrowing. Do not issue bonds to cover the state budget deficit.

b) Regarding basic construction, it must exploit the total social investment capital and focus on meeting economic and social goals. The state's concentrated investment capital through the budget and credit must be allocated strictly, in accordance with the current actual capacity of capital sources, ensuring effective use; it is essential to develop programs and projects, and implement all prescribed procedures thoroughly and seriously. Clearly identify the mobilization of various capital sources (budget capital, credit loan capital, enterprise capital, basic depreciation capital, land use right revenue capital, capital raised through stock and bond forms, foreign loan capital, etc.) to meet the investment needs for each project. State budget capital should mainly be allocated for socio-economic infrastructure projects that lack the ability to recover capital; concentrated construction should be completed decisively, ensuring timely payment for the volume of implemented investment, firmly refusing to spread out many projects over long construction periods causing waste. For projects with the ability to recover capital, the state will create mechanisms and encourage units and enterprises to find suitable capital sources.

c) Ensure balance between money and goods at the level of total supply and demand, and balance supply and demand for key goods that are important for production and living, preventing price surges for these goods.

3. Give utmost importance to policy and mechanism solutions to ensure the implementation of the plan. Ministries, ministerial-level agencies, and government agencies within their sectoral management functions shall issue or submit to competent authorities for issuance in 1995 policies, mechanisms, and guidelines aimed at continuing to accelerate the reform process towards thoroughly liberating productive forces, ensuring smooth operation of the market mechanism, and enhancing the effectiveness of state management.

4. The Ministry of Finance shall cooperate with ministries and localities to study and submit to the Government for supplementation and amendment of the decentralized budget management mechanism by August 1995, aiming to stabilize revenue sources and expenditure tasks for localities over several years, creating conditions for localities to proactively arrange plans and decide on their budgets, encouraging localities to exploit existing potentials to increase budget revenues and achieve self-balancing of budgets.

5. The State Planning Commission and the Ministry of Finance must closely coordinate to guide ministries and localities in calculating plans that are appropriate to the overall situation, ensuring positive and stable balances.

- The State Planning Commission shall guide ministries and localities in building and consolidating plans for economic and social development; take the lead in working with ministries and localities, with the participation of the Ministry of Finance, regarding economic and social plans, basic construction investment projects, and national programs allocated and funded by the central government to ministries, sectors, and localities.

- The Ministry of Finance shall guide ministries and localities in building and consolidating plans for state budget revenue and expenditure forecasts; take the lead in working with ministries and localities, with the participation of the State Planning Commission, regarding state budget revenue and expenditure plans and national programs allocated funds and included in the regular expenditure plans of ministries, sectors, and localities.

6. Progress and time frame:

- By August 10, 1995, ministries and localities shall submit their plans to the State Planning Commission and the Ministry of Finance.

- From this date until September 10, 1995, the State Planning Commission and the Ministry of Finance, according to the division of labor above (point 5), shall carry out work with ministries and localities and consolidate plans to submit to the Government, relevant Committees of the National Assembly, and the National Assembly, Session VIII, Ninth Term; prepare for allocation and assignment of plans by the end of December 1995 so that ministries, sectors, and localities can implement them from the beginning of 1996.

The construction and implementation of the 1996 plan are of great significance, providing momentum for the implementation of the 1996-2000 socio-economic plan. The Prime Minister requests that comrades, ministers, heads of ministerial-level agencies, and government agencies, and chairpersons of provincial people's committees closely and strictly direct the process of constructing and consolidating the 1996 plan, ensuring the realization of the directions, tasks, and objectives set forth.