Enhancing transparency and ensuring effective management of loan mobilization and use

On the morning of November 3, continuing the 10th Session, the National Assembly worked in the hall, listening to the Presentation and Report on the examination of the draft Law amending and supplementing a number of articles of the Law on Public Debt Management.

The National Assembly worked in the hall, listening to the Presentation and Report on the review of the draft Law amending and supplementing a number of articles of the Law on Public Debt Management.

The National Assembly's Economic and Financial Committee agreed on the necessity of amending and supplementing a number of articles of the Law on Public Debt Management to fully institutionalize the Party's policies and orientations to arrange and perfect the apparatus of the political system and perfect the legal system, promote decentralization and delegation of power, ensure synchronization in institutional reform, and at the same time, remove a number of difficulties and obstacles that arise in practice.

Presenting the Draft Law on amending and supplementing a number of articles of the Law on Public Debt Management, Minister of Finance Nguyen Van Thang said that the draft Law consists of 3 Articles. Of which, the content of 23/63 articles is amended and supplemented, of which 17/63 articles are amended and supplemented, some provisions in 5 articles are abolished and new provisions in 5 articles are added.

Strengthening the initiative and responsibility of local authorities in budget use

To continue implementing the policy of decentralization and delegation of power, associated with the arrangement and streamlining of the organizational apparatus, and improving the effectiveness of governance, the draft Law has stipulated the delegation of power to the Prime Minister and the Ministry of Finance in a number of tasks related to debt management, enhancing the initiative and self-responsibility of local authorities in deciding and using the budget. Accordingly, it supplements clearer regulations on the duties and powers of the President and the Government, amends and supplements the powers and duties of the Prime Minister and the Ministry of Finance, specifically as follows:

In order to reduce and simplify procedures, the draft Law proposes to supplement regulations requiring ministries, provincial People's Committees, municipal People's Committees, enterprises with 100% charter capital held by the State, and subsidiaries of enterprises with 100% charter capital to prepare proposals for ODA loans and foreign preferential loans and send them to the Ministry of Finance for evaluation and submission to the Prime Minister for approval as a basis for implementing investment procedures for programs and projects. Information on loan proposals focuses on 4 contents of the expected foreign loan and the letter of interest from the sponsor (if any), reducing the amount of information that the competent authority needs to provide at this stage.

At the same time, supplement regulations on the time limit for the Prime Minister to approve annual public borrowing and debt repayment plans to synchronously implement the State budget estimates, public investment plans, and annual borrowing and debt repayment plans when approved by competent authorities.

To remove difficulties for public service units in arranging collateral for re-borrowed capital, institutionalizing the incentive policy in Resolution No. 57 of the Politburo, the Government proposed to include in the Law a provision assigning the Government to provide detailed instructions, as a basis for stipulating that collateral is not required for science and technology organizations and public higher education institutions when re-borrowing ODA loans and foreign preferential loans from the Government.

Some contents were omitted to ensure consistency with the provisions of the State Budget Law (amended), including abolishing provisions related to the 3-year public debt management program, abolishing regulations on forms of borrowing from the State financial reserve fund and procedures for submitting to the Prime Minister for decision on borrowing from the State financial reserve fund...

Ensuring decentralization and delegation of power go hand in hand with transparency and effective management of loan mobilization and use.

The review report presented by Chairman of the Economic and Financial Committee Phan Van Mai stated that the Committee agreed on the necessity of amending and supplementing a number of articles of the Law on Public Debt Management to fully institutionalize the Party's policies and orientations to arrange and perfect the apparatus of the political system and perfect the legal system, promote decentralization and delegation of power, ensure synchronization in institutional reform, and at the same time, remove a number of difficulties and obstacles that have arisen in practice.

Regarding the contents of decentralization and delegation of powers, the Committee basically agrees with the draft Law amending and supplementing a number of contents related to the decentralization of authority for the Prime Minister to decide on the loan limit for re-lending and the annual Government guarantee limit associated with the approval of the Public Debt Loan and Repayment Plan, contributing to shortening the procedures for approving the loan limit for re-lending and the annual Government guarantee limit; supplementing the tasks of the Ministry of Finance to ensure flexibility in the implementation process and reduce administrative procedures. In addition, the Committee recommends that the Government continue to review to ensure that the regulations on decentralization and delegation of powers go hand in hand with enhancing objectivity, transparency and ensuring effective management of loan mobilization and use.

Regarding the conditions for re-borrowing and the method of re-lending, the Committee agreed on the regulation that public service units are allowed to access ODA loans and foreign preferential loans. However, it is recommended to consider the regulation that the lending agency is not subject to credit risks, carefully assess the impact and risks to ensure public debt safety; review to have appropriate and strict regulations in case public service units do not meet the conditions for re-borrowing.

Regarding the organization of borrowing and debt repayment of local governments, the draft Law is amended in the direction of removing the regulation that the province "seeks the approval of the Ministry of Finance on the conditions and terms of local government bonds before organizing the issuance", decentralizing the authority to the Provincial People's Committee to report to the Provincial People's Council for approval of the Bond Issuance Project.

The Chairman of the Economic and Financial Committee said that the Committee recognized that the amendment aims to increase local autonomy, local responsibility, reduce administrative procedures, shorten issuance time, and create conditions for localities to mobilize capital faster for projects. In addition, it is necessary to clearly stipulate the full authorization for the provincial People's Council to approve the issuance of local bonds guaranteed within the total loan amount approved by the National Assembly and within the local budget deficit limit as prescribed, ensuring public debt safety.

According to Nhan Dan

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