Slow disbursement of public investment: A bottleneck in economic growth

Sluggish disbursement of public investment capital

2025 is identified as the year to accelerate the implementation of the medium-term public investment plan for the 2021-2025 period, with investment resources from the State budget being prioritized by the National Assembly and the Government at a high level. Accordingly, the National Assembly and the Government set a target for public investment with a total planned capital of nearly VND 900,000 billion, expected to create an important driving force for economic growth.

However, a report from the Ministry of Finance shows that from the beginning of the year to March 31, the disbursement of public investment capital reached VND 78,712 billion, reaching 8.98% of the plan, reaching 9.53% of the plan assigned by the Prime Minister. This disbursement level is lower than the same period in 2024 - reaching 12.27% of the plan. Of which, the National Target Program is estimated to disburse VND 3,638.8 billion, reaching 16.57% of the plan assigned by the Prime Minister.

Illustration photo.

The Ministry of Finance said that in the first 3 months of this year, 13/47 ministries and central agencies and 36/63 localities had an estimated disbursement rate compared to the plan assigned by the Prime Minister above the national average.

Besides, there are still 16 ministries, central agencies and 6 localities with very low disbursement, below 5%, including: Ministry of Science and Technology, Ministry of Health, Hanoi National University, Ho Chi Minh National University, Ministry of Industry and Trade, Ho Chi Minh City, Can Tho, Hanoi, Binh Phuoc, Ca Mau, Quang Ninh...

In particular, up to 17 ministries, central and local agencies have not yet disbursed, including: Central Committee of the Vietnam Fatherland Front, Government Inspectorate, Vietnam Academy of Social Sciences, Ministry of Foreign Affairs, State Audit...

Explaining the main reasons for the slow disbursement of public investment capital, Mr. Le Tien Dung, Deputy Director of the Investment Department (Ministry of Finance) said that first of all, there are limitations and shortcomings in mechanisms and policies, especially inappropriate regulations in the Law on Public Investment and the Law on State Budget. The Ministry of Finance is urgently reviewing and submitting to competent authorities to remove difficulties, simplify procedures, and promote the shift from pre-inspection to post-inspection, creating more favorable conditions for practical implementation.

In addition, there are problems in the implementation process. During the process of restructuring the apparatus and reviewing, there are projects that have completed the preparation step, but the inspection found that they were no longer effective, forcing the implementation to stop.

In addition, some localities have not yet allocated budget revenue. This directly affects the progress of implementing projects using public investment capital, while 2025 requires boosting public investment to support economic growth.

“In order to remove difficulties in disbursing public investment capital, in early March, the Prime Minister established 7 working groups led by 7 Deputy Prime Ministers, with the task of directly working with localities, ministries and branches to resolve arising problems. The Ministry of Finance will summarize the difficulties and report to the working groups in the coming time,” informed the Deputy Director of the Investment Department.

Removing "bottlenecks" creates resources for growth

According to the rule for many years in disbursing public investment capital, it is "leisurely at the beginning of the year" but "difficult at the end of the year". However, 2025 is the last year of the medium-term public investment plan for the period 2021 - 2025, slow disbursement of public investment capital will greatly affect the economic growth target from many different perspectives.

Ms. Nguyen Minh Thao, Institute for Policy and Strategy Studies (CIEM). (Photo: VOV.VN)

Ms. Nguyen Minh Thao, Institute for Policy and Strategy Studies (CIEM) calculated that a 1% increase in disbursed public investment capital will increase GDP by 0.06%, contributing positively to economic growth.

“In addition, if we promote public investment disbursement, it will have a big impact on the economy; including the impact on liquidity of the economy, on credit institutions, and on businesses' access to capital,” Ms. Thao acknowledged.

However, according to Ms. Thao, to disburse public investment to reach 95% of the set plan is a very heavy task in the context that many projects are still facing many barriers and bottlenecks.

Regarding subjective causes, according to Ms. Nguyen Minh Thao, within the same institution, some ministries and localities have good disbursement, while others have slow disbursement. This shows that the factor of implementation organization is the reason why some places have good implementation, while others have not met requirements.

“In some ministries and localities, there is a fear of making mistakes, and when they are afraid of making mistakes with a project, they always have to ask for opinions from many places, prolonging the implementation time. Therefore, it is necessary to make more adjustments at the implementation level when there are too many procedures for asking for opinions, often unnecessary, prolonging public investment projects,” Ms. Thao expressed concern.

According to many economic experts, the pressure to disburse public investment capital this year is very high. If there is no breakthrough in mechanism, responsibility as well as identification and handling of violations, the possibility of completion will be lower than in 2024.

To speed up the disbursement of public investment capital, Dr. Nguyen Bich Lam, an economic expert, said that the Government and legislators need to remove institutional bottlenecks with the perspective of renewing thinking and vision, all for the benefit of the nation, resolutely eliminating industry and group interests in all forms, and prioritizing a comprehensive review to remove bottlenecks and bottlenecks in the formation, allocation and implementation of investment projects.

For national investment projects, regional projects and large projects, the Government and localities need to have strong political determination from the central to local levels, from departments and branches, not just investors, consultants and contractors, to quickly resolve difficulties in the implementation process; procedures need to be simplified, shortening implementation time; focusing resources, paying attention to direction, improving investment capital efficiency; being flexible in attracting capital from economic sectors, not just relying on state capital to be able to implement many component projects at the same time...

In the official dispatch No. 32/CD-TTg dated April 5 on urging the acceleration of disbursement of public investment capital in 2025. The Prime Minister severely criticized 19 ministries, central agencies and 28 localities that by March 15 had not yet allocated in detail the public investment capital plan from the state budget (NSNN) for 2025 that had been assigned; requested the above ministries, central agencies and localities to seriously review the collective and individual responsibilities for handling according to the Party's regulations and the State's laws. At the same time, the Prime Minister criticized 30 ministries, central agencies and 27 localities that by March 31 had a disbursement rate below the national average.

The Prime Minister emphasized that in the context of many unpredictable fluctuations in the world economy, affected by the US imposing tariffs on Vietnamese exports, the results of public investment disbursement are of special importance, contributing to promoting growth, stabilizing the macro economy, ensuring major balances of the economy, and successfully achieving the economic growth target of 8% or more.

According to VOV.VN
https://vov.vn/kinh-te/cham-giai-ngan-dau-tu-cong-diem-nghen-tang-truong-kinh-te-post1193099.vov

Source: https://thoidai.com.vn/cham-giai-ngan-dau-tu-cong-diem-nghen-tang-truong-kinh-te-212817.html