President U Thein Sein’s last budget before the election is a bonanza for the public. Spending will rise in education, health, water quality, the agricultural sector and electricity supply as the percentage of the budget spent on the military continues to fall.

Presenting the budget proposals to the Pyidaungsu Hluttaw on January 26, Minister for Finance U Win Shein said the budget also contained allocations to raise civil service and military salaries.

While both foreign debt and the budget deficit are set to rise, U Win Shein insisted they would remain at acceptable levels.

“As we seek to become a modernised and developed country, we cannot draw up a budget with no deficit. But we can keep it to about 5pc of GDP,” he said.

National income is expected to increase only 0.65 percent this year, while spending is set to rise by 7.12 percent, pushing the deficit to GDP ratio out from 4pc to almost 5pc, he said.

The deficit in 2014-15 stands at about K3 trillion – with K17 trillion in income and K20 trillion in expenditure – and the total economy at about K73.3 trillion.

In a move likely to intensify interest in plans to raise government salaries, U Win Shein said the government would spend K2.902 trillion on rises for 1.4 million civil servants and military personnel.

In response to criticism that increasing civil servants’ salaries is inflationary and hurts the rest of the population, U Win Shein called on “all sectors” to work together in finding solutions “to the difficulties that may arise as a consequence of raising salaries”.

Foreign debt reached K20 trillion last September, up from K16 trillion when the government took office. The ratio between GDP and the foreign debt will be about 27pc, but the government will keep it below 50pc, he said.

The Ministry of Commerce has also predicted that the trade deficit for the coming year will exceed US$4 billion, with inflation predicted to reach as high as 8.11pc, and the kyat approaching K1020 to the dollar.

To increase electricity supply, the Ministry of Electrical Power plans to spend K2.465 trillion, including foreign loans, making it the fourth-largest spender after the ministries of finance, energy and defence.

The government has appropriated K1.702 trillion to fill the deficit in regions and states, and K119 billion in financial aid for a special fund for rural development.

He said K1.4 trillion has been appropriated for education, up by more than K251 billion from last year’s K1.1 trillion. The extra funding will go to hire more than 50,000 additional teachers, including 16,800 for primary schools, 30,000 for middle schools and 10,000 for high schools.

The free education system launched in recent years for primary and middle-school students will be extended to higher education in the coming year under the National Education Law. More than K18.4 billion has been appropriated to provide free textbooks to primary school pupils, as well as exercise books and a uniform. Middle school students will receive K6.63 billion for their school fees and membership fees for Parent and Teacher Associations, and K3.93 billion for textbooks.

Another K14.5 billion has been appropriated for university stipends and scholarships, and K1.9 billion in support of students in the Government Technical Institute and Government Technical School to be run by the Ministry of Science and Technology.

U Win Shein said K757.437 billion had been appropriated for health, an increase of more than K48 billion over this year’s K708.949 billion. This will fund the purchase of advanced medical equipment, including two magneto-diagnostic machines, two X-ray machines and 50 electro-surgical machines to government hospitals.

The government will also train an additional 3153 medical staff, including doctors, dentists, and medical technicians, 1300 nurses and 2440 basic medical staff.

The health budget also includes K37.492 billion for free medical treatment for government staff.

http://www.mmtimes.com/index.php/national-news/12964-govt-proposes-higher-deficit-to-cover-pay-rises-social-spending.html