Cabinet approves Bt350 billion deficit budget for 2012 fiscal year


BANGKOK, Sep 13 – The Cabinet on Tuesday approved a budget deficit of Bt350 billion for the 2012 fiscal year, starting Oct 1, according to Finance Minister Thirachai Phuvanatnaranubala.

Of the total budget, annual government spending was approved at Bt2.33 trillion, an increase of 7.4 per cent from the fiscal 2011 budget at Bt2.1 trillion.

The investment budget, counting for 16.5 per cent of the overall budget, was agreed at Bt380 billion, a 8.1-per cent increase year-on-year.

The next fiscal year’s revenue is aimed at Bt1.98 trillion, a rise of 11.9 per cent from that of Fiscal Year 2011 at Bt1.77 trillion.

The total budget approved was based on economic conditions in 2012 forecast to expand at 4.5-5.5 per cent and have inflation rates at 3-4 per cent.

In this regard, Deputy Finance Minister Boonsong Teriyapirom said among other issues the Cabinet approved on Tuesday were an extended period for a diesel tax cut and the Pheu Thai Party’s first-car project.

The fuel tax cut, which is to last until Dec 31, will affect Excise Department revenues of Bt25 billion, but the government is trying to maintain the tax rate at Bt0.0050 from the current rate of Bt5.31, Mr Boonsong said.

The first-car project, also approved by the Cabinet, is to begin Friday and continue until Dec 31 next year in order to help middle-income earners otherwise unable to afford their first cars. Around 500,000 vehicles are projected to be sold according to the programme.

Conditions include that the car must have no more than a 1500cc engine or priced no more than Bt1 million if it is a pick-up truck with more than a 1500cc engine, while buyers must be at least 21 years old and possess the vehicle for their own use for the period of five years. Car owners can redeem compensation from the government equal to their vehicles’ excise tax of not more than Bt100,000 after one year of possessing the vehicle.

Meanwhile, deputy government spokeswoman Anuttama Amornwiwat said the Cabinet also approved the National Rice Policy Committee’s proposal on the 2011/2012 rice mortgage scheme for in-season unmilled rice, which is to start Oct 7 and continue until Feb 29.

The criterion for mortgaged rice is that the level of humidity per ton of unmilled rice must be under 15 per cent. The mortgage price for Hom Mali fragrant rice (Thai jasmine rice) is set at Bt20,000, Thai Pathumthani fragrant rice at Bt16,000, while other types of fragrant rice are at Bt18,000, and 100 per cent unhusked rice at Bt15,000.

The Commerce Ministry will find additional sources of funds for this Bt400 billion programme.