Directive No. 442/TTg on the development of economic and social plans and state budget estimates for 1997.

DIRECTIVE

ON THE DEVELOPMENT OF THE ECONOMIC AND SOCIAL PLAN AND THE STATE BUDGET ESTIMATE FOR 1997

The situation in implementing the economic and social development plan for the first six months of 1996 generally achieved satisfactory results: production, circulation of goods, import and export maintained a relatively high growth rate and developed positively; inflation was contained; many aspects of society showed positive changes. However, there were still some difficulties remaining, such as: although state budget revenue improved, many sources of income remained below the initial estimates, including import and export taxes, land use rights fees, and revenues from non-state-owned commercial and service sectors; tax evasion and smuggling were not effectively curbed; implementation of basic construction plans was slow; large inventories of domestically produced products affected the growth rate and state budget revenue.

To successfully implement the Resolution of the Ninth National Assembly's eighth session (October 1995) on tasks for 1996 to develop the economic and social plan and estimate the state budget for 1997, the Prime Minister requests ministries, sectors, and localities to carry out the following tasks:

I. MANAGEMENT AND IMPLEMENTATION OF THE 1996 PLAN:

Ministries, sectors, and localities should assess the implementation of the plan, objectives, programs, and projects in the first six months of the year, clearly identify achievements and shortcomings, analyze causes, and propose measures to be implemented in the last six months of the year to strive for achieving and exceeding the targets set for the 1996 economic and social development plan; at the same time, promptly implement the following tasks:

1. The Ministry of Planning and Investment shall coordinate with the Ministry of Finance and relevant ministries and sectors to review major economic balances, propose measures to promote business production, stabilize prices, and expand markets. Ministries, sectors, and localities should direct units to fully utilize production capacity, increase output, reduce costs, lower production costs, and strive to increase state budget revenue.

2. The Ministry of Planning and Investment and the Ministry of Finance shall coordinate with the Ministry of Trade and the General Department of Customs to review the list of imported goods based on current price levels, production conditions, and supply-demand situations, and submit proposals to the Government to adjust the import structure within the plan and promptly adjust import tariffs within the permitted range to stimulate domestic production, balance money and goods, control inflation, and ensure state budget revenue.

3. The Ministry of Finance and the General Department of Customs shall cooperate with relevant sectors and localities to strengthen inspection and supervision, prevent loss of state budget revenue, and combat smuggling; adopt proactive and resolute measures to urge units to pay off all outstanding revenues from 1995 and the first half of 1996 into the state budget; by all means, efforts must be made to complete the state budget revenue target for 1996 as approved by the National Assembly. 4. Ministries, sectors, and localities should urgently organize the implementation of assigned basic construction investment plans, complete necessary procedures for basic construction investment to serve as the basis for capital allocation. The Ministry of Planning and Investment, the Ministry of Construction, and the Ministry of Finance shall coordinate to resolve issues related to investment capital management mechanisms, ensuring strict management of basic construction investment capital while simplifying procedures to facilitate the progress of planned projects.

5. In managing state budget expenditures, ministries, sectors, and localities should prioritize investment in basic construction, national programs, salaries, salary-like payments, and urgent matters; limit and postpone unnecessary expenditures such as procurement, repairs, and conferences.

From now until the end of the year, no additional budget expenditures outside the plan will be approved except in cases of real urgency. Ministries, sectors, localities, and units must practice thrift, rearrange expenditure tasks to ensure funding for new urgent needs. For expenditure requirements that have been decided but not allocated in the initial budget plan, they need to be reviewed for phased implementation and included in the 1997 budget plan.

The Ministry of Finance shall guide ministries, sectors, and localities in assessing their ability to fulfill budget revenue and expenditure targets for the entire year and propose to the Government areas where savings can be made.

6. Ministries, sectors, and localities should conduct mid-year reviews of thrift practices, waste prevention, anti-corruption, and anti-smuggling activities, propose measures for the second half of the year, report to the Government, and send copies to the Ministry of Finance for consolidation.

7. The State Price Control Board shall lead and coordinate with relevant ministries and sectors to submit to the Government measures to stabilize prices for the second half of the year, keeping the annual consumer price index and service price increase below 10%.

8. Ministries, sectors, and localities should propose key solutions to ensure the achievement of sectoral, regional, and local development goals under their responsibility, suggest mechanisms and policies to further unleash production capacity and better mobilize resources across economic sectors; identify mechanisms to be studied and issued in 1996 for implementation starting in 1997.

II. DEVELOPMENT OF THE 1997 ECONOMIC AND SOCIAL PLAN AND STATE BUDGET ESTIMATE

1. Main Tasks for 1997:

The task for 1997 is to continue leveraging positive factors achieved over the years, addressing existing weaknesses, and taking advantage of new favorable opportunities to develop and create conditions to achieve the economic and social goals set by the Eighth National Party Congress.

The 1997 plan will continue to reflect and allocate according to the general tasks and guiding principles for the five-year period from 1996 to 2000. The economic and social development targets for 1997 must both demonstrate the continuity of sustained and stable high growth and align with the long-term overall economic and social development planning of the country, as well as the development planning of each sector, locality, and region.

In 1997, efforts should be concentrated on solving the following five major issues:

a. Continuing to maintain a high economic growth rate, improving the efficiency of the economy, and creating positive changes in the implementation of development programs and areas outlined in the five-year plan.

b. Rapidly increasing the country's financial strength, continuing tax system reforms, restructuring the budget based on the State Budget Law, encouraging increased revenue and enhancing the effective use of state budget funds. Continuing to form good mechanisms and policies for mobilizing all national financial resources. Enhancing the operational capacity of specialized banks, ensuring effective capital mobilization and lending to meet the needs of economic growth. Continuing to implement measures to control and manage inflation, striving to keep the consumer price index and service prices below 10% for the entire year of 1997.

c. Promoting the effective implementation of cultural and social development programs; creating new progress in culture, arts, radio, television, health care for the people, population planning work, and other social aspects. Particularly, significant development must be achieved in education and training, taking a step towards the goal of raising the overall educational level of the population, continuing to eliminate illiteracy and universalize primary education; training, nurturing, and improving the quality of human resources to meet current and long-term needs.

d. Concentrating more effort on the economic and social development program of mountainous regions, ethnic minority areas, remote areas, and border areas, enabling these regions to achieve new developments based on exploiting local resources and mobilizing nationwide support. Emphasizing the development of transportation networks; constructing water conservancy systems; bringing electricity to district centers and community centers; developing healthcare, education networks, broadcasting coverage, telecommunications, and postal services...; implementing poverty reduction programs.

e. Continuously consolidating and innovating state management machinery at various levels and sectors; urgently advancing administrative reform programs, establishing order and discipline in economic and social management; maintaining political stability and social security to promote economic development and ensure solid national defense and security in all situations.

2. Forecasting some key indicators for economic growth in 1997 compared to 1995 as follows:

- Gross Domestic Product (GDP) increasing by 9-10%;

- Value of agricultural, forestry, and fishery production increasing by 4.5-4.9%;

- Value of industrial production increasing by 14-15%;

- Value of service industries increasing by 12-13%;

- Total export turnover increasing by 28%;

- Total import turnover increasing by 23%.

3. Regarding the State Budget:

- Striving to stabilize, improve the health of the national finances, and significantly enhance them; collecting taxes and fees according to the law, comprehensively and effectively tapping all sources of income, preventing loss of revenue with results; ensuring reasonable and frugal expenditure needs for regular expenses, allocating funds to repay maturing and overdue debts; reserving a higher proportion and amount for investment and development compared to previous years.

- The State Budget estimate must be prepared from a solid foundation, ensuring certainty and reality to create conditions for stable budget management decentralization at levels from three to five years according to the State Budget Law; in the short term, calculating to stabilize over three years from 1997-1999.

- The budget balance must ensure positivity and reality; all budget revenues and expenditures must be fully reflected in the State Budget estimate and managed through the National Treasury. For government loans from abroad for relending, they must be included in the State Budget for loan and repayment management.

- Striving to collect taxes and fees at 20-21% of GDP and allocate approximately 70% of this revenue for regular spending; prioritizing education and training spending and ensuring health care, transportation, information and culture, sports, science, defense, and security and social order and safety needs.

- It is necessary to allocate sources to settle domestic budget loans for previous years' development investments; continue to limit spending on purchasing small cars and building new offices for state agencies, the Party, and mass organizations using state budget funds. For basic construction projects funded by the state budget, works that exceeded plans by December 31, 1996, must be arranged in the 1997 plan for settlement; works that did not complete their plans, if needed to continue, must be arranged in the 1997 plan. In allocating investment capital for basic construction, particular attention must be paid to infrastructure construction in mountainous regions, the Central Highlands, the Mekong Delta..., achieving clear changes in these regions in 1997.

- The State Budget deficit must correspond to the ability to borrow domestically and internationally with favorable terms; not borrowing commercially abroad, not issuing and borrowing domestically with short terms and high interest rates to cover the State Budget deficit. The State Budget deficit level (excluding foreign loans for relending) must be lower than 3% of GDP.

- Ministries and state agencies, according to their assigned functions, have the responsibility to build specific socio-economic targets such as crude oil production volume, production volume of certain key products (cement, electricity, beer, cigarettes...), import and export turnover and structure, number of students, number of hospital beds, staff quota... and promptly notify the Ministry of Finance and the Ministry of Planning and Investment to serve as the basis for building the 1997 plan and budget estimate.

- In 1997, it was the first year to implement the State Budget Law and to calculate for stabilizing the management hierarchy of the budget for subsequent years, so the levels of government did not have sufficient bases regarding the allocation of revenue sources, expenditure tasks, the ratio of revenue distribution, and the amount of additional funding from higher-level budgets to decide their own budget estimates before the National Assembly decided on the State Budget estimate. Therefore, the People's Committees at all levels shall base themselves on this directive and the guidance from higher levels to prepare their own budget estimates to submit to higher levels for consolidation and preparation of the State Budget estimate; when the National Assembly approves the State Budget estimate, the People's Committees at all levels will adjust their own budget estimates in accordance with the plans assigned by higher levels, and submit them to the People's Councils for decision.

III. IMPLEMENTATION:

1. The Ministry of Planning and Investment and the Ministry of Finance shall closely cooperate to guide ministries, sectors, and localities in calculating plans that are appropriate to the overall situation, ensuring positive and solid balances.

- The Ministry of Planning and Investment shall guide ministries, sectors, and localities in building and consolidating economic and social development plans; take the lead in working with ministries, sectors, localities, with the participation of the Ministry of Finance, on economic and social plans; lists of projects and investment volumes for each construction project.

- The Ministry of Finance shall notify the figures for budget revenue and expenditure checks and guide ministries, sectors, and localities in building and consolidating state budget revenue and expenditure estimates; take the lead in working with ministries, sectors, localities, with the participation of the Ministry of Planning and Investment and relevant ministries and sectors, on state budget revenue and expenditure estimates, and funds for national programs.

- Ministries, sectors, and agencies managing national programs shall coordinate with the Ministry of Planning and Investment and the Ministry of Finance to work with related ministries, sectors, and localities on economic and social development tasks and budget estimates within their areas of responsibility.

- The People's Councils and People's Committees of provinces and centrally-administered cities shall guide and organize the work of preparing the 1997 State Budget estimate according to the provisions of the State Budget Law.

2. Progress and time frame:

- By August 10, 1996, ministries, sectors, and localities shall send reports on economic and social development plans and 1997 budget estimates to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and submission to the Government.

- From now until September 20, 1996, the Ministry of Planning and Investment and the Ministry of Finance, based on their assigned tasks, shall conduct work with ministries and localities, consolidate plans for submission to the Government and relevant committees of the National Assembly to ensure timely submission to the ninth session of the ninth National Assembly; simultaneously propose budget allocation schemes for each ministry and additional central budget amounts for each province to be submitted to the Standing Committee of the National Assembly for immediate decision after the National Assembly approves the State Budget estimate. 3. The Prime Minister requests ministers, heads of ministerial-level agencies, heads of governmental agencies, and Chairmen of provincial and centrally-administered city People's Committees to closely supervise and strictly control the process of building and consolidating the 1997 plan, ensuring the implementation of the directions, tasks, and goals set forth.