Nghe An Province, situated in the rough northern central region, faces numerous difficulties in boosting up its economic development. The large province has a city, a township, 17 districts and 473 communes, wards and towns, including 15 mountainous districts and 242 mountainous communes, of which 115 communes are enjoying the benefits of the Programme 135. Nghe An has a population of nearly 3 million, or 3.74 per cent of the national total. With these severe conditions, the province always has to expend more than it receives.
The province possesses quite backward production equipment and technologies than other major cities so that its products are less competitive than those other localities. Some of its investment projects have become mature but they have not reached designed capacities and their products seem unmarketable. Therefore, the province has to pay for them. Consequently, it has less money for the future projects.
The province feels hard to accumulate money for the State budget when taxes are reduced for agriculture land, key projects and corporate incomes and more preferential taxes are offered to enterprises that change ownership types. In the meantime, expenditures are on the rise due to salary rise, more payments for social policies and increasing expenditures on socio-economic development policies.
Payment Balance Solutions
Being aware of the importance of the state budget in carrying out socio-economic development plans, the Nghe An People’s Committee annually issues instructions and introduces measures to increasing sources of incomes, strengthening budget management, preventing revenue losses, fighting against smuggle and trade frauds. The provincial government also regularly holds talks with enterprises to seek measures to solve existing difficulties and entanglements.
Besides, the Department of Finance has joined hands with the Tax Department and Customs Office to apply synchronous solutions to manage taxes, increase budget revenues and preclude revenue losses.
The department also raises budget revenues by applying many policies to encourage all economic sectors to do business and to pull up demands. It also supports the development of the provincial economy by pumping money in transport projects and irrigation works.
The department has been implementing budget expenditure reshuffling. In the 2001-2005 period, it continues to restructure its budget spending, increase budgets for investment and development and reduce subsidies. This is the time the department improves the financial and budgetary management. In 2001-2003, it implemented the State Budget Law issued in 1998 and since 2004 it enforced the amended State Budget Law issued in 2002. This is also the time the department implements many budget expenditure reforms like savings, anti-squandering, pay rise and others.
In addition, the department also increases responsibilities of its staffs and subsidiaries.
In the 2001-2004 period, Nghe An’s economy always develops steadily. The budget expenses and receipts (including funds from the Central Budget) seem to go to balancing point. The budget revenues always grow, exceeding forecasts and consignments of the Provincial People’s Council. The total budget increased from VND421 billion (US$26.31 million) in 2000 to VND1,702 billion (US$106.37 million) in 2005 (a treble increase), up about 32.2 per cent per annum in the five-year period. The Budget collection becomes more stable while the expenditure and reception is also more rational. In four consecutive years, budget turnovers of all its 19 districts and township exceed initial forecasts. In the 2001-2005 period, the total domestic incomes hits VND4,369 billion (US$273.06 million), accounting for nearly 70 per cent of the Nghe An total budget revenues.
In the past years, Nghe An Province completed its development encouragement policies and mechanisms. Particularly, it issued many financial policies like hybrid rice and maize price supports, shrimp raising assistances, export encouragements, investment incentives, industrial zone development encouragements, bonuses for excellent directors and chief accountants, and funding for the construction of new farm produce processing factories. The province also helps farmers to develop agriculture through seed supports, land reclamation supports and others. It also seeks investment for infrastructure projects like irrigation system and rural roads.
The province always prioritises economic development with much importance to developing crop seeds and breeding animal and building material areas for processing factories. It has helps several industries develop quickly like processing industry, beer production, and cement production.
Le Xuan Dai
Deputy director
Nghe An Finance Department
Vietnamese
