State Budget 2013 Meets Pre-election Promises
27 December, 2012

The state budget of 2013 cut down administration expenses as much as possible to be socially-oriented and tailored to the pre-election promises of Georgian Dream, political coalition that came to power in Georgia.

New government of Georgia succeeded to approve the main fiscal document of the county for 2013 by December 20, 2012 in line with the budgetary law deadlines and full compliance with the pre-election promises of Georgian Dream political coalition that took the office out of the ex-ruling party of National Movement in this past October.
Economic analysts accentuate that the incumbent government handled with the difficult task to work out the state budget 2013 within the tightest deadlines from October 24 [when the new government was actually approved] to December 20 in order not to violate the budget related legal procedures and, what is very important, to tailor it to the priorities of Georgian Dream instead those of National Movement who drafted the state budget project for 2013 prior Georgian Dream took its office term legally.
Ultimately the income prognosis of the state budget 2013 stands at GEL 8.425 million and the expenditures are capped by GEL 6.920 million. Social-insurance, health-care, education, agriculture, aiding of Involuntarily Displaced People (IDPs), environment and infrastructure development are the priority sectors. Therefore the financing of social and health-care increases by GEL 630 million totally in 2013 compared to 2012. Around GEL 2.473 billion is earmarked to cover all social-and-health-care related costs including pensions. This kind of growth in funding is caused by increased number of people who will get health-insurance from the state as well as increase of pensions. Although the promised increase of pensions as well as social-and-health care packages will be implemented gradually.
“To avoid inflation pressure,” Irakli Lekvinadze, an economic analyst, explains.
Initially the currently active differentiated pension rates fixing GEL 110 for people over 60 and GEL 125 for people over 67 as well as pensions of the first group invalids will be streamlined at GEL 125 since April of 2013; and the subsistence minimum equivalent pensions of GEL 150 will be adopted for all the aged pensioners and first group invalids starting September of the next year. Pension of other invalid categories as well as victims of political repressions and families bereft of breadwinners will also increase since September.
All the citizens of Georgia who are not covered by the state health-insurance will enjoy the minimal insurance package that provides medicals service in emergency cases. However all of them will enjoy the basic health-insurance package since July that apart of emergency case aid also provides financing for planned surgeries, medical check and diagnostic etc. The socially vulnerable category will receive doubled assistance since July again.
Education and science ministry will be financed by GEL 670 million that envisages increased voucher-based funding to schools mainly that lays ground to increase of salaries to teachers. Financing of the educational grants for students and programs supporting science also enhanced.
Agriculture ministry gets GEL 241 million that means almost 61% of growth [a GEL 92.1 million] compared to GEL 148.9 million allocated in 2012.The lion’s share of the funding comes on procurement of agriculture technique like tractors and motor-blocks, as well as on repair of irrigation systems. This financing also envisages tilling of 30 thousand hectare of lands and irrigation of 7 thousand hectares. 500 thousand small farmers will get the state assistance to fund the upcoming spring cultivation works. In addition an Agriculture Fund with GEL 1 billion of budget will be created to channel financing to the agriculture sector apart of the state budget.
The budget of the Ministry of IDPs and Resettlement increase by 92% from GEL 25 million to GEL 48 million and envisages rehabilitation of residential houses of IDPs.
The Ministry of Regional and Infrastructure Development gets GEL 901 million. GEL 501.7 million and 181.9 million out of the figure will finance road and regional municipal infrastructure rehabilitation works respectively. GEL 80 million is allocated to the Ministry of Culture and Monument Protection – not a single museum, theatre or any other state-based cultural establishment will face drop in the budget next year.
Accents in 2013 will fall on clearing the foreign state debt too: GEL 400 million is allocated to this end in the state budget. Nodar Khaduri, Minister of Finances, accentuated that the year of 2013 is quite burdensome from the point of view of clearing foreign-debt related expenditures and promised that other years after 2013 will be less and less encumbering to this end.
Economic analysts approve the state budget 2013 as find it much more transparent, detailed and targeted on programs. The much criticized paragraph of “other expenses” making around 13% of the state budget in previous years and completely non-transparent became clear his time providing full description of expenses it targets on.
“Taking into account that the budget has been shaping out against the backdrop of political battles and clashes [with National Movement] it is pretty well-elaborated, clear, social-care and agriculture oriented as promised before elections,” Soso Archvadze, an economic analyst, said.
Lekvinadze thinks that the financing of priority sectors was increased skillfully at the expense of cutting administration costs: financing of interior and defense ministries decreased by GEL 15.2 million and GEL 30 million respectively. Ministry of Finances also faced a GEL 18.2 million drop in funding. The Presidential and Governmental Funds with traditional funding as GEL 50-50 million each traditionally and enjoying notorious fame of non-transparency also shrunk. The drop referred to the Presidential fund only that gets GEL 10 million next year. Governmental fund retained GEL 50 million. Khaduri explains this by difficulties in monitoring the presidential fund’s outlays.


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