Provincial-level People’s Committees would be allowed to raise capital but must use mobilized money for proper purposes and assure funding sources for payment of principal and interest amounts, according to a Ministry of Finance-drafted circular.
This is one of four principles which local administrations must adhere to when raising money for investment in socio-economic development or other projects in their localities.
Provincial governments would also have to take measures to assure publicity, transparency and compliance with law in the fundraising process.
In addition, the debit balance of a local budget before and after the capital mobilization must not exceed the capital mobilization limits prescribed in the Law on the State Budget, the Law on Public Debt Management and other guiding documents. Local administrations would be held responsible for the effectiveness of their fundraising plans.
However, the maximum amount to be mobilized by a local administration in a budgetary year must not exceed 30 percent of its annual budget for capital construction. Particularly for Hanoi and Ho Chi Minh City, such limit might be respectively lifted to 100 percent and 150 percent.-