Hanoi Granted Special Financial and Budget Mechanisms

To be specific:, compared to Decree 123/2004/ND-CP and Decree 112/2015/ND-CP in effect, Decree 63/2017/ND-CP inherits and supplements several important contents aimed at enhancing support resources from the central budget (NSTW), ensuring a positive balance within the scope of national financial security and gradually aligning with the capabilities of the central budget.

The budget expenditure estimates of Hanoi are determined based on a higher allocation rate compared to other centrally run provinces and cities, applied for the period of local budget stability.

Furthermore, to ensure borrowing aligns with the debt repayment capacity of each locality, the Law on State Budget stipulates that Hanoi's debt balance must not exceed 60% of the revenue allocated to the local budget according to the classification. This provision allows the city to mobilize additional resources for major infrastructure projects. Simultaneously, the loans are calculated within the city's budget deficit and are annually decided by the National Assembly, thereby maintaining control over the city's budget repayment capacity.

Regarding targeted supplements from the increase in central budget revenue compared to estimates assigned by the Prime Minister, the regulation has been amended as follows: It does not mandate that the central budget fully supplements targeted amounts to the city corresponding to the entire increase in central budget revenue compared to the estimates assigned by the Prime Minister. Instead, it stipulates that the city receives targeted supplements from the increase in central budget revenue, but this should not exceed the increase in revenue compared to the estimates assigned by the Prime Minister and should not be higher than the increase in revenue in the city compared to the previous year's actual revenue. This regulation ensures that the central budget has funds to provide targeted supplements to the city budget.

Regarding regulations on mobilizing investment capital, Decree 63/2017/ND-CP basically inherits the current mechanism, adding provisions that, in addition to prioritizing ODA capital support for the city, will also prioritize support for less preferential capital other than ODA. For programs and projects that are the expenditure tasks of the city budget, the Government loans from abroad for the city to re-lend or partially allocate as per regulations. Additionally, provisions are added for the city to apply investment forms for projects under public-private partnership (PPP) models.

Unlike the current mechanisms of the Capital, Decree 63 revises and supplements regulations on the debt balance of mobilized capital sources, enhancing support resources from the central budget for environmental, transportation, and irrigation fields, ensuring a positive balance within the scope of national financial security and gradually aligning with central budget capabilities.

To be specific:, for some major projects with large investment scales in the fields of environment, transportation, and irrigation managed by Hanoi that exceed the local budget balancing capacity, the city's People’s Committee reports to the Government to present to the National Assembly for decisions on support from the central budget for the city budget to implement each project.

Source: Kiem sat Online

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