New impetus from specific mechanisms and policies for the development of Nghe An province.
The National Assembly recently voted to approve a Resolution on supplementing the pilot program of specific mechanisms and policies for the development of Nghe An province. These mechanisms and policies will have significant implications for the socio-economic development of Nghe An in the coming period.
Reality
During the period 2021-2024, the global economy experienced complex developments, strongly impacted by the Covid-19 pandemic and regional armed conflicts. In Vietnam, businesses faced numerous difficulties due to the pandemic and the slow recovery of the economic recession.
In Nghe An province, budget revenue has increased, but slowly. In 2021, budget revenue reached 19,911 billion VND. In 2022, budget revenue reached 22,491 billion VND. In 2023, budget revenue reached 21,508 billion VND.
In the first six months of 2024, Nghe An's budget revenue is estimated at 11,897 billion VND, reaching 74.8% of the target set by the Provincial People's Council, and 140.2% compared to the same period last year.
The structure of state budget revenue in the province is assessed as not truly sustainable. Revenue from land use fees accounts for a large proportion and is trending upwards. However, state budget revenue from production and business activities is trending downwards. Key enterprises such as beer and hydropower (accounting for approximately 30% of total revenue from all enterprises) continue to face difficulties due to declining consumption trends and beer sales; increasingly harsh weather conditions, with frequent heatwaves and droughts, are unfavorable for hydropower operations.
In addition, dairy companies are operating at full capacity and are unable to contribute to increased state budget revenue. New projects that have come into operation have not generated the expected revenue: Hoa Sen Steel Company, MDF wood, VSIP, etc.
Cement businesses that have received significant investment, despite generating substantial revenue, do not incur value-added tax liabilities due to offsetting them against the input costs of the investment project...
Meanwhile, local government budget expenditures have increased over the years, from VND 27,638 billion in 2021 to VND 32,945 billion in 2022; VND 35,661 billion in 2023; and are projected to reach VND 36,090 billion in 2024 (a 31.8% increase compared to 2021). Budget expenditures for the entire period 2021-2024 reached VND 132,284 billion. The revenue-expenditure balance remains a significant burden...
The importance of support resources
The National Assembly's resolution on supplementing the pilot program of specific mechanisms and policies for the development of Nghe An province contains notable points such as: Nghe An will be allocated an additional 50% of the central government's supplementary targeted public investment capital according to the principles, criteria, and norms stipulated in the National Assembly Standing Committee's resolution on the principles, criteria, and norms for allocating public investment capital from the state budget for the period 2026-2030.
This capital is intended for investment in key projects within the province and for the development of socio-economic infrastructure in the western region of Nghe An. The Provincial People's Council shall decide on the list of projects stipulated in this clause…
A representative from the Nghe An Department of Planning and Investment stated: These policies aim to mobilize and supplement investment resources for the province, given the limited local resources. This will significantly contribute to ensuring the successful implementation of the goals of Resolution No. 39-NQ/TW of the Politburo on building and developing Nghe An province by 2030, with a vision to 2045.
In particular, the allocation of an additional 50% of the central government's supplementary public investment capital to localities will create crucial conditions for the province to focus on investing in and completing the infrastructure system in the area, especially key infrastructure projects and socio-economic infrastructure in the western region of Nghe An, which are currently bottlenecks that need to be addressed.
Recently, many projects in Nghe An province have been in urgent need of funding, such as: the Vinh - Cua Lo road; upgrading the road connecting National Highway 1A to National Highway 7A; the Quynh beach tourist road; roads in the western districts; the extension of the N5 road to Tan Ky; the Mo Vinh bridge project across the Ro River in Thanh Chuong district; the Vinh - Vientiane road; and the access road to the Cua Lo deep-water port.
Similarly, projects include developing Vinh city into a regional center in the North Central region for trade, tourism, logistics, healthcare, education and training, science and technology, high-tech industries, and transforming Do Luong district into a town before 2030…
Given this urgent need for capital, Nghe An province's economy will benefit from the spillover effects of public investments and infrastructure projects formed from expenditures implemented on schedule thanks to policies under a special mechanism.
It has been learned that, for the period 2021-2025, the total investment capital from the State budget allocated to Nghe An province is 39,154.4 billion VND (according to the Prime Minister's capital announcement). This includes supplementary budget funds specifically allocated to the locality.The medium-term public investment plan allocates 5,811.4 billion VND (excluding capital allocated to key projects, inter-provincial and inter-regional projects, and national target programs).
Due to high demand, the capital allocation plan in the public investment plan for the 2021-2025 period only meets about 25% of the needs of new projects starting in the province, especially for targeted supplementary funding from the central government to the locality.
Therefore, many infrastructure projects in the province have not been able to be implemented. This is also one of the factors affecting the achievement of basic goals and targets such as the GRDP economic growth rate.
Resolution No. 39-NQ/TW dated July 18, 2023, of the Politburo on building and developing Nghe An province until 2030, with a vision to 2045. The province has set a target of achieving an average GRDP growth rate of approximately 10% during the period 2021-2030. This is a rather challenging goal for Nghe An province.
In addition, the total projected investment capital for socio-economic development in the period 2026-2030 is approximately 1,090,000 billion VND, of which the investment capital from the State budget for development is 61,000 billion VND.
Therefore, implementing specific mechanisms and policies to support Nghe An province in securing additional resources for key socio-economic infrastructure projects in the province and the western region is practical and necessary to gradually achieve the goals set forth in Resolution No. 39-NQ/TW of the Politburo.
