Boost in govt spending will spur growth: Prayuth

Meanwhile, the government will lay out a roadmap to drive economic growth in the long term. It will focus on the digital economy through reform of the Information and Communications Technology Ministry and also reform all related agencies, reform the tax policy to create fairness for all in society, and restructure the agriculture sector from pure agriculture to value-added agricultural products, he said. 

At the meeting to assign the action plan to government agencies and top ministry officials yesterday, MR Pridiyathorn Devakula, the deputy prime minister for the economy, said Bt410 billion budget from fiscal 2014 was still lying unused. Contracts to spend a total of Bt170 billion have been approved but agreements were yet to be signed. The government will push to sign agreements within this month, which will boost the economy in the last quarter of this year. 

Meanwhile, the government will speed up spending of the fiscal 2015 budget, which begins in October 2014. It will sign contracts to spend Bt300 to Bt400 billion of the budget in the last quarter of this year. This is part of the plan to boost the economy to achieve 2-per-cent growth in the last quarter of 2014, Pridiyathorn added.

All government offices have to report their budget spending every three months. 

The government also has middle- and long-term action plans to push sustainable growth, Prayuth said.

The middle plan focuses on the country’s investment in infrastructure, involving the government and the private sector or public-private partnership. This measure will reduce the country’s public debt, the prime minister said.

Priority projects are 10 mass-transit routes. Bidding for construction of the railway and trains will open next year. When these projects take off, it will boost the confidence of the private sector and bring in more investments in the property and construction sectors, Pridiyathorn said.

Pridiyathorn added that the government also would create long-term plans to re-engineer the economy such as by focusing on the digital economy. It will set up the National Digital Economy Committee headed by the prime minister, push tax reforms such as inheritance tax, and land and construction tax to create fairness in society. This move will create fairness for all parties in society and boost the country’s tax income, from the average annual tax income of about 19 per cent of gross domestic product to 24-25 per cent of GDP. The increase in revenue will enable allocation of a higher investment budget in the long term.

The government also will set up the Asean Committee to integrate all concerned parties to prepare the country for the Asean Economic Community, which comes into effect in 2015, Pridiyathorn said.

“We believe that when we implement all our policies within one year – the period this Cabinet will manage the country – following phase 2 of the plan chalked out by the National Council for Peace and Order, the country will have a road map to drive long-term economic growth,” Pridiyathorn said.