Following is the full text of report on the implementation of central and local budgets for 2011 and on draft central and local budgets for 2012, which was submitted for review on March 5, 2012 at the Fifth Session of the Eleventh National People's Congress and was adopted on March 14:
REPORT ON THE IMPLEMENTATION OF CENTRAL AND LOCAL BUDGETS FOR 2011 AND ON DRAFT CENTRAL AND LOCAL BUDGETS FOR 2012
Fifth Session of the Eleventh National People's Congress March 5, 2012
Ministry of Finance
The Ministry of Finance has been entrusted by the State Council to submit this report on the implementation of central and local budgets for 2011 and on draft central and local budgets for 2012 to the Fifth Session of the Eleventh National People's Congress (NPC) for your deliberation and approval and for comments and suggestions from members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).
I. IMPLEMENTATION OF CENTRAL AND LOCAL BUDGETS FOR 2011
In 2011, the people of all the country's ethnic groups worked diligently with one heart and one mind under the firm leadership of the Communist Party of China (CPC). All localities and government departments comprehensively carried out decisions and arrangements of the central leadership, conscientiously implemented relevant resolutions of the Fourth Session of the Eleventh NPC, firmly grasped the theme of scientific development and the main thread of accelerating the transformation of the pattern of economic development, and strengthened and improved macro-control. As a result, the economy developed in the direction anticipated through macro-control, living standards constantly improved, reform and opening up continued to deepen, and the Twelfth Five-Year Plan got off to a good start. On this foundation, further progress was made in fiscal development and reforms, and government budgets were satisfactorily implemented.
1. Implementation of Public Finance Budgets
National revenue totaled 10.374001 trillion yuan, an increase of 24.8% over 2010 (here and below). Adding the 150 billion yuan from the central budget stabilization fund, utilized revenue totaled 10.524001 trillion yuan. National expenditure amounted to 10.892967 trillion yuan, up 21.2%. Adding the 289.2 billion yuan used to replenish the central budget stabilization fund and the 191.834 billion yuan of local government expenditure carried forward to 2012, national expenditure came to 11.374001 trillion yuan. Total national expenditure therefore exceeded total national revenue by 850 billion yuan.
Breaking them down, central government revenue amounted to 5.130615 trillion yuan, 111.9% of the budgeted figure and an increase of 20.8%. The central budget stabilization fund contributed 150 billion yuan, bringing the total revenue used by the central government to 5.280615 trillion yuan. Central government expenditure amounted to 5.641415 trillion yuan, 103.8% of the budgeted figure and an increase of 16.7%. This consists of 1.651419 trillion yuan of central government spending, up 3.3%, and 3.989996 trillion yuan in tax rebates and transfer payments to local governments, an increase of 23.4%. Adding the 289.2 billion yuan used to replenish the central budget stabilization fund, central government expenditure totaled 5.930615 trillion yuan. Total expenditure exceeded total revenue, leaving a deficit of 650 billion yuan, 50 billion less than the budgeted figure. The outstanding balance on government bonds in the central budget was 7.204451 trillion yuan at the end of 2011, which was under the budgeted limit of 7.770835 trillion yuan for the year.
|Figure 1 Balance of Central Government Finances in 2011 (Xinhua Photo)
Revenue collected by local governments came to 5.243386 trillion yuan. Adding the 3.989996 trillion yuan in tax rebates and transfer payments from the central government, local government revenue totaled 9.233382 trillion yuan, an increase of 26.6%. Local government expenditure amounted to 9.241548 trillion yuan, up 25.1%. Adding the 191.834 billion yuan carried forward to 2012, local government expenditure totaled 9.433382 trillion yuan. Total expenditure exceeded total revenue by 200 billion yuan.
|Figure 2 Balance of Local Government Finances in 2011 (Xinhua Photo)
1) Implementation of main items in the central budget
(1) Main revenue items and use of surplus revenue
On the whole, the revenue situation was good in 2011, which reflected factors including steady and robust economic growth, good corporate performance, price increases, improved tax collection and administration, and the placement of past off-budget funds under budgetary management. Central government revenue exceeded the budgeted figure by 544.6 billion yuan, mainly because revenue projections in early 2011 were based on calculations using relevant targets for economic and social development. As it turned out, most economic indicators surpassed forecasts in the course of implementing the budget, and consequently tax revenue exceeded the budgeted figure. Specifically, imports greatly exceeded the figure projected at the start of the year, up 24.9%, and revenue from import taxes surpassed the budgeted figure by 272.9 billion yuan. The value added of large industrial enterprises increased by 13.9%; fixed asset investment, 23.6%; retail sales of consumer goods, 17.1%; the consumer price index, 5.4%; the output producer price index (PPI), 6%; and the input PPI, 9.1%. All of these increases exceeded forecasts at the beginning of the year, and revenue from domestic value-added tax (VAT) and excise tax surpassed the budgeted figure by 114.3 billion yuan. Profits of large industrial enterprises nationwide rose 25.4%, higher than projected early last year, and corporate income tax revenue exceeded the budgeted figure by 164.2 billion yuan. (Export tax rebates surpassed the budgeted figure by 120 billion yuan, which resulted in a decrease in revenue by the same amount.)
Main revenue items
Domestic VAT revenue was 1.827739 trillion yuan, 104% of the budgeted figure; domestic excise tax revenue, 693.593 billion yuan, 106.7% of the budgeted figure; receipts from VAT and excise tax on imports, 1.356026 trillion yuan, 120.9% of the budgeted figure; revenue from customs duties, 255.91 billion yuan, 117.9% of the budgeted figure; corporate income tax revenue, 1.002181 trillion yuan, 119.6% of the budgeted figure; individual income tax revenue, 363.306 billion yuan, 116.4% of the budgeted figure; VAT and excise tax rebates on exports, 920.474 billion yuan, 115% of the budgeted figure; and non-tax receipts, 267.695 billion yuan, 128.7% of the budgeted figure.
Use of surplus revenue
In accordance with relevant laws and regulations as well as the relevant resolution of the Fourth Session of the Eleventh NPC, of the 544.6 billion yuan in central government surplus revenue, we disbursed 94.4 billion yuan to increase tax rebates and general transfer payments to local governments, 30 billion yuan to increase education spending, 7.6 billion yuan to increase science and technology spending, 16 billion yuan to increase funding for low-income housing projects, 62.1 billion yuan to increase expenditure on road construction and fuel subsidies for certain people with financial difficulties and some public service industries, 20.7 billion yuan to increase one-off living allowances to poor people, 50 billion yuan to reduce the central government deficit, and 263.8 billion yuan to replenish the central budget stabilization fund for budgetary purposes next year. The State Council has reported on the use of central government surplus revenue in 2011 to the twenty-fourth meeting of the Standing Committee of the Eleventh NPC.