Decision No. 984/TTg on certain policies and measures for managing the plan for economic and social development and state budget estimate for 1997.

Pursuant to …;

On several guidelines and measures for managing the economic and social development plan and state budget estimate for 1997

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To ensure the effective implementation of the tasks for 1997 approved by the tenth session of the ninth National Assembly, the Government decides on several guidelines and measures for managing the implementation of the economic and social development plan and state budget estimate for 1997 in key areas:

I. ON RAISING, USING AND MANAGING FUNDS FOR INVESTMENT DEVELOPMENT

It is necessary to amend, supplement and promulgate some new mechanisms and policies to fully mobilize and effectively utilize all potential labor, capital and resources to serve the cause of economic and social development, focusing on the following issues:

1. Propose to the Standing Committee of the National Assembly to amend the Ordinance on Compulsory Labor Service according to the requirements of the new situation, ensuring that every citizen of compulsory labor age (except those exempted) must contribute a certain number of working days each year to build and repair infrastructure projects. Issue regulations on the equivalent labor service system corresponding to military service time for male youths subject to military service but not recruited into the army, mainly for building major infrastructure projects. Those who are mobilized but do not directly participate in labor service must pay an amount of money equivalent to the market wage rate at their locality. The Government will specify the methods of mobilizing, managing and using the contributions of the people in the form of labor or money, ensuring fairness, effectiveness, avoiding arbitrariness and waste. Measures should be taken to mobilize other resources to build public works to meet the needs of national economic and social development.

2. Implement the policy of accelerating socialization in education, healthcare, culture, sports... while diversifying investment sources to develop these fields.

a) Issue policies to encourage the development of semi-public and private educational and healthcare facilities in various forms, paying particular attention to the necessary conditions for the establishment and operation of such facilities, such as leasing physical assets (land, classrooms...), providing loans, social insurance benefits and other rights for teachers, doctors, and staff working in these facilities. Establish regulations on the establishment and operation of joint venture hospitals and hospitals invested 100% by foreign investors. Define the management and supervision mechanism of state agencies over the activities of semi-public, private educational and healthcare facilities with foreign investment.

Reform the mechanism to ensure funding for public schools and hospitals towards gradually covering the costs for these institutions, initially regular expenses with reasonable salaries for teachers and doctors, through officially set and publicly announced tuition and medical fees, while prohibiting extraneous charges. At the same time, clearly define the assistance system and methods for helping poor people and policy families study and receive medical treatment, partly funded by the state budget and voluntary contributions from organizations and individuals. Reform the health insurance mechanism. The Government will stipulate fundamental issues and guide local authorities to apply the new mechanism within an appropriate scope; learn from practical experience to perfect and widely implement the new mechanism.

b) Cultural and sports sectors actively study applicable forms of socialization in their types of activities and strengthen revenue-generating activities to partially offset operating costs.

In the field of sports, strongly promote mass participation in developing the sector, encourage the establishment of clubs for each sport with activity funds voluntarily contributed by members and partially supported by the State. Simultaneously, make full use of long-term sponsorship or patronage from domestic manufacturers, large businesses, and foreign investors in Vietnam.

3. Supplement specific policies to encourage domestic investment alongside resolving difficulties in establishing and operating business models to tap into the investment potential of various economic components, focusing on priority areas and export production. Develop regulations for coordination between state economic agencies and industry associations to guide and assist household economies and businesses, primarily in economic information and marketing, capital, and new technology application.

Issue regulations on the BOT (build-operate-transfer) mechanism and similar forms applicable to domestic investment; implement the mechanism of using land rental fees to construct infrastructure projects based on land planning, simplifying administrative procedures for land use permits or land leases.

Continue issuing project bonds for some investment projects with the ability to recover capital, prioritizing electricity production, cement production, and transportation infrastructure construction.

4. Implement Decree 59/CP of the Government on financial management and business accounting regulations for state-owned enterprises; during implementation, promptly adjust and supplement provisions that are not truly suitable to the actual situation. Pay attention to supervising the implementation of regulations on production cost accounting, profit distribution after tax, to prevent waste, corruption, and increase accumulation and development investment of state-owned enterprises.

Conduct a comprehensive assessment of the fixed asset value in state-owned enterprises, including the value of land use rights transferred to enterprises; allow accelerated depreciation to repay investment loans, upgrade equipment and technology. Measures should be taken to provide capital for enterprises with development potential and high returns.

Resolve issues to strongly promote the shareholding reform of state-owned enterprises that have been selected and prepare for the next steps. Vigorously reorganize enterprises that have implemented corrective measures but still suffer from prolonged losses; select pilot projects for auctioning off some small enterprises not in essential sectors.

5. Develop various forms of medium and long-term capital attraction and use a portion of short-term credit within permissible limits for medium and long-term loans. The State implements policies to subsidize part of the interest rate on bank deposits to increase investment credit sources. Expand the issuance of treasury bills, government bonds, project bonds, bank bills, and insurance products.

Adjust interest rates appropriately according to inflation indices, gradually reduce the interest rate spread between rural and urban areas, and between domestic and foreign currencies. Improve reserve requirements regulations; establish a deposit insurance fund, incorporate credit insurance into the operations of state insurance companies.

Continue to implement the policy of managing exchange rates reasonably based on supply and demand to encourage exports and control imports. Limit and strictly manage importation through deferred payment loans; gradually improve the trade balance and international payments balance. Review foreign exchange management systems; clearly define the scope of non-use of foreign currency for domestic payments and lending. Establish organizations and regulations to manage all foreign debts.

The State Bank implements measures to improve credit activities, actively recover due debts, reduce overdue debt ratios, inspect and handle cases where bank officials violate credit regulations for personal gain.

6. Enhance the effectiveness of state investment credit; for priority investment projects, in addition to the preferential loan form to implement the project (preference before), it is necessary to apply a pilot form of financing based on assessing actual effectiveness after the project has been implemented with other sources of funds (post-preference), to ensure investment effectiveness.

For infrastructure projects financed by foreign loans with the ability to recover capital, which have long used budget funds as counterpart funds, now switch to state credit and use revenue from fees to repay debt.

7. Review and supplement ODA and FDI projects in line with development plans for industries and regions according to the strategy of industrialization and modernization focusing on exports, enhancing the competitiveness of domestic products and the economy. Complete the management mechanism and coordination of ODA funds, implement the newly amended Foreign Investment Law, overcome both subjective and objective obstacles to quickly increase the disbursement of committed ODA funds, and enhance the implementation ratio of FDI.

8. Each ministry, sector, and local government's basic construction investment plan must fully reflect the sources of capital under state control and supervision, including the state budget, state investment credit, self-investment capital of state-owned enterprises (from basic depreciation, post-tax profits, project bonds, raised shares), and foreign direct investment project capital under various forms. Sector heads and local authorities at all levels are responsible for strictly managing and using state budget and credit funds efficiently; supervise and assist in the development investment of state-owned enterprises and foreign companies; guide and create favorable conditions for the development investment of other economic components.

9. Recording plans and allocating, paying funds for state-funded projects shall be carried out according to the principles and conditions stipulated in Decree No. 42/CP, supplemented with specific provisions as follows:

a) For Group C projects, central ministries, agencies, provincial people's committees, centrally-administered municipalities, and total companies established pursuant to Decision No. 91/TTg (referred to as Total Company 91) must register on time and only register once in the first quarter of 1997. If they fail to register according to the regulations, they will not be notified of the capital plan. Capital allocation for Group C projects must ensure that more than 60% is reserved for projects and items completed within the year.

b) Projects in Groups A and B that have been recorded in the plan must be notified of the capital investment plan at the beginning of the year and temporarily allocated capital according to the system from January 1997.

Based on the approved construction progress of projects funded by the state budget, financial agencies improve procedures and processes to ensure the allocation and payment of basic construction investment funds in accordance with the construction progress, avoiding long-term arrears in the payment of completed investment volumes of projects recorded in the plan for 1997.

Requests for adjustment, supplementation, and change in the structure of investment capital can only be considered and resolved in two rounds in June and October 1997.

10. Organize the implementation of Prime Minister Decision No. 53/TTg on managing national programs well. Promote the review and approval of national programs that have not completed the required procedures according to Decision No. 531/TTg. In implementing approved programs, provincial people's committees should proactively arrange the integration of national programs in their respective areas based on the principle of ensuring the most effective implementation of each program's objectives. The construction investment capital (including operational capital with a nature of construction investment) of programs must be managed according to the Investment and Construction Management Regulations issued together with Decree No. 42/CP.

II. ON BUDGET MANAGEMENT

1. Implement synchronously all management measures for revenue collection, ensuring correct and full collection according to the law, striving to achieve and exceed the state budget revenue estimate approved by the National Assembly:

a) Ministries and localities focus on resolving difficulties for enterprises to boost production and product sales, improving business efficiency; thereby nurturing state budget revenue sources.

b) The tax authority and customs improve management methods for revenue collection and enhance the effectiveness of the revenue collection system; closely coordinate with local authorities to strengthen inspection and supervision to prevent revenue loss, especially in areas where revenue loss still occurs and has potential for revenue generation such as import and export, non-state-owned economy, enterprises with foreign investment, and housing and land; handle outstanding receivables according to the Prime Minister's directive; publicize the tax rate for each production and business household to increase the self-awareness of units in tax payment.

c) Reward localities that make efforts to combat revenue loss and smuggling in excess of export and import tax and special consumption tax plans:

- For goods exported and imported through land borders, localities will enjoy 100% of the excess revenue from export and import taxes and special consumption taxes assigned by the State.

- For special consumption taxes collected from domestically produced goods and export and import taxes, and special consumption taxes collected from goods passing through seaports and airports, localities will be entitled to a portion of the excess revenue assigned.

- The above rewards can only be used for the purpose of investing in infrastructure construction projects.

2. Budget expenditure must be highly frugal and effective. If revenue does not meet the budget estimate, corresponding expenditure reductions must be made; no allocation of funds should be made without a source of revenue; any amendment, supplementation, or issuance of new regulations increasing expenditure in the year shall only be implemented when there is a guaranteed source of funding.

Financial agencies ensure the even distribution of funds throughout the year according to the plan and the progress of work (including supplementary allocations to lower-level budgets according to the plan). In cases where revenue is insufficient to cover expenditure requirements, the Ministry of Finance may temporarily borrow funds from the State Bank to ensure the progress of planned expenditures by ministries, sectors, and localities, and must repay within the year. Expenditures already recorded in the budget and guaranteed by revenue sources must be promptly executed and not arbitrarily reduced.

3. Encourage localities to create investment capital for infrastructure development from the following sources:

a) Revenue from land use rights transfer fees and land rental fees, including rental fees from foreign-invested enterprises (excluding rental fees from oil exploration and exploitation activities), localities may use 100% for infrastructure construction.

b) Proceeds from the sale of state-owned housing, localities may use 100% for developing housing funds and constructing residential area infrastructure.

c) Lottery revenue: provinces with revenue not exceeding 20 billion dong may use 100%; provinces with revenue exceeding 20 billion dong may use an additional 50% of the excess revenue for welfare construction projects such as hospitals and schools.

d) Agricultural land use tax on rice cultivation, localities may use 50% (mountainous provinces may use 100%) for agricultural investment and rural economic restructuring.

đ) Revenue from forest resources taxes, including standing timber sales (if applicable), may be used for forest protection, planting, and infrastructure construction.

4. Penalties for traffic violations, fines and confiscations from smuggled goods are fully allocated to local budgets; localities may use 70% for expenses related to forces performing duties in their jurisdiction (including police, transportation, customs, market management forces...). The needs of central agencies to perform these tasks are met according to approved regular budget allocations.

5. Strictly and effectively implement the policy of thrift in budget expenditure through the following measures:

a) The Ministry of Finance will cooperate with relevant agencies to study and issue standards, norms, and expenditure systems suitable for the national budget's capacity and the characteristics of administrative and public service units; submit to the Government for approval of car usage standards for each level.

b) Limit new construction of office buildings and purchase of small cars for administrative and public service units, Party organizations, and mass organizations funded by the state budget. Units need to reasonably arrange and utilize existing office space and means of transport to serve their work. In cases of real necessity, the Prime Minister authorizes the Minister of Planning and Investment to resolve office building construction issues, and the Minister of Finance to resolve small car purchases, based on strict examination of needs and construction and procurement funding sources; every quarter, the two Ministries must report to the Prime Minister on the resolution of these cases. Construction of office buildings and purchase of small cars must comply with financial management regulations and within the allocated budget.

c) The Government's Organizational and Cadre Management Office needs to inspect the implementation of staffing and salary funds of ministries, sectors, and localities, and take measures to address cases of excessive staffing and salary funds that increase budget expenditure.

d) Agencies using state budget funds must have specific and practical programs to implement the thrift policy and eliminate wasteful spending; thoroughly reduce conference and ceremonial event expenses. The Ministry of Finance will inspect and report to the Prime Minister on the expenditure for conferences and ceremonies by agencies using state funds.

III. ON THE PLANNING MECHANISM

To ensure the autonomy in planning arrangements and enhance responsibility in directing and implementing plans, the Government allocates some essential indicators to maintain regions, industries, and fields; while strengthening monitoring and control over plan implementation. Regarding units assigned state plans, in 1997, there were additional state-owned holding companies established under Decision No. 91/TTg.

A. NATIONAL PLAN INDICATORS ASSIGNED BY THE PRIME MINISTER

1. Assign to ministries and central agencies:

a) Basic construction investment:

- Total concentrated basic construction investment capital, including project implementation capital;

- Project implementation capital structure by several key industries and fields;

- List and investment capital (including construction and equipment) for projects and works in Group A (including ODA projects with equivalent capital to domestic-funded Group A projects).

b) Finance:

- Assign to ministries and central agencies: Total budget expenditure and detailed items of expenditure; including expenditure for national programs;

- Assign to the Ministry of Finance: Total state budget revenue;

- Assign to the General Department of Customs: Total export tax, import tax (including special consumption tax on imported goods, excluding additional charges, fees, and surcharges);

c) Import and export (assigned to the Ministry of Trade): Total value of exports and imports;

d) National reserves:

- Assign to the National Reserve Agency: Rice, grain, major materials, and equipment reserves;

- Assign to defense, security, and certain sectors: Special-purpose goods reserves;

2. Assign to State-owned enterprises 91:

a) Investment capital for basic construction:

- Total concentrated basic construction investment capital, including project implementation capital;

- List and investment capital (including installation and equipment) for projects and works under Group A;

b) Total expenditure funded by the state budget;

3. Assign to provinces and centrally-administered cities:

a) Finance:

- Total state budget revenue within their jurisdiction; special consumption tax on domestic products; export tax, import tax, special consumption tax on imported goods, including those through land borders;

- Total local budget expenditure; including basic construction expenditure from centralized funds, investment from retained sources at the local level;

- Proportion of revenue distribution between the central budget and provincial budget (%);

||| - Additional funding from the central budget (if any).

b) Basic construction investment:

- Total concentrated basic construction investment capital, including project implementation capital;

- Project implementation capital structure by several key industries and fields;

- List and investment capital for projects and works under Group A;

B. THE PRIME MINISTER DELEGATES:

1. The Minister of Planning and Investment, based on the economic and social development plan for 1997 decided by the National Assembly and the Government, assigns to ministries, sectors, and localities guiding indicators to concretize the targets set by the Government, creating conditions for ministries, localities, and units to implement in accordance with the direction and goals of the state plan;

In the field of basic construction investment, the Prime Minister delegates the Minister of Planning and Investment to assign the list and investment capital (including installation and equipment) for projects under Group B, planning funds, preparatory investment funds, project implementation preparation funds; announce the list of Group A and B projects in their jurisdiction, planned investment credit (after the Prime Minister decides the total investment credit amount, recipients, and loan interest rates);

The Ministry of Planning and Investment guides production and business tasks for key products of each State-owned enterprise 91 (commercial electricity, coal, crude oil, natural gas, steel, nitrogen fertilizer, cement, paper, sugar, coffee, food circulation...); announce planned investment credit;

C. REGARDING GUIDANCE ON IMPLEMENTATION AND MANAGEMENT OF THE PLAN

1. Based on the policies and measures for managing the economic and social plan and the state budget estimate approved by the Prime Minister, ministries, sectors, provinces, and centrally-administered cities must concretize and guide issues under their responsibility to ensure uniform implementation nationwide;

2. In accordance with the management regulations of the Government, ministries, localities, and State-owned enterprises 91 must report monthly on the implementation of the plan in key areas such as production, basic construction, budget revenue and expenditure, monetary policy, import and export, material and commodity circulation, inflation... to the Office of the Government, the Ministry of Planning and Investment, the Ministry of Finance, and the General Statistics Office no later than the 25th of each month;

3. Implement a monthly coordination meeting system among some agencies, chaired by the Minister of Planning and Investment, on the implementation of the plan, to promptly propose measures to address emerging issues to ensure successful completion of economic and social development tasks according to the National Assembly's Resolution.