FNC criticises budget deficits, delay

The Federal budget for 2003, which was approved by the government earlier this month, was hotly debated by the Federal National Council yesterday.

The government announced a budget of Dh23.28 billion for 2003 with a deficit of Dh2.209 billion, an increase of Dh40 million over the 2002 figure. The councilmen voiced their concern over the repeated deficits .

Dr Mohammed Khalfan bin Kharbash, Minister of State for Financial and Industrial Affairs, and other senior ministry officials took part in the debate. The session was chaired by Speaker Saeed Mohammed Al Ghandi.

Members also criticised the delay in presenting the budget to the council. The council approved it after a lengthy debate, and urged the government to prevent deficit budgets in the future.

The councilmen also called on the government for earlier preparation of the budget and cited a constitutional requirement to present the draft to the council for discussion at least two months before the start of the fiscal year.

Members also emphasised the contributions of other emirates to the budget. Abu Dhabi and Dubai provide more than 50 per cent of the annual budget.

The house committee on Financial and Industrial Affairs in its report said: "Each emirate shall allocate a certain part of its annual revenues to cover the annual budgetary expenditures."

The report said the contribution to the annual budget by all emirates falls under Article 127 of the Constitution, and in accordance with Supreme Council rulings. Participating in the debate, bin Kharbash said the ministry is doing its best to prepare budgets that are in line with the needs of the country.

According to the report, Khalid Al Bustani, Assistant Undersecretary, said Cabinet decree No 2 of 2002 was issued to shift from a traditional terms and chapters budget to a programmes and performance budget.

The new system would ensure the ideal budget performance and prevent expenditure in useless programmes. The ministry said advanced countries have shifted to programmes and performance budgets.

The council was told that the revenue contribution from Abu Dhabi was Dh12.489 billion, Dubai Dh1.2 billion, and the share from ministries was Dh7.382 billion.

The report recommended adopting other sources of income to reduce dependence on oil revenues. The council also called on the private sector to play a pivotal role in national economic and social development.

The council was also told that defence has been allocated Dh6.27 billion, while interior security received Dh3.174 billion. The social services sector, which includes education, health and welfare affairs, has been allocated Dh8.904 billion.