Discuss 3 recommendations of the Financial, Economic and Industrial Affairs Committee

Al-Watani: The 2021 budget takes into account the fight against Corona and the benefits of citizens

The "committee" noticed the receipt of the bill, including a financial deficit.

From the source

The Federal National Council discussed three parliamentary recommendations, contained in the report of the Financial, Economic and Industrial Affairs Committee, concerning the draft federal law regarding the federation budget for the year 2021, which was approved in the middle of last week, the most prominent of which is that Emiratisation programs in the government and private sectors are not affected.

The report, which was approved by the Council, identified two reasons for accepting the draft law "2021 budget" in parliament, as it was received from the government: The first is taking into account the repercussions of the Corona pandemic.

The second: to be assured of the effectiveness of government measures, which are defined by the draft law regarding financing the difference between expenditures and revenues.

In detail, the committee's report on the draft federal law on the federation’s general budget for the year 2021 stated that the committee adopted a general plan to study the draft law, based on an inventory of social priorities and the extent of their inclusion in the federation’s general budget draft, and the extent to which financial estimates achieve strategic goals and their relevance to operational plans implemented for them. Stressing that the committee took into account the repercussions of the Corona pandemic (Covid-19) on the whole world, while studying the draft law.

The report stated that the committee noticed the arrival of the bill, including a deficit of four billion and 897 million dirhams, pointing out that this deficit was imposed on the committee to adopt an approach based on three axes, during its study of the draft law, the first is the extent to which the budget is consistent with constitutional and legal obligations, and the second is the extent of permissibility of approval The budget includes a deficit, and the extent of the effectiveness of the means decided by the draft law to cover this deficit, and the third is related to the impact of this deficit in the services and benefits provided to citizens.

The report refuted the three axes, explaining that the committee found, through its study of the constitutional requirements of the budget, that it conforms to the principle of "annual", as it will be in effect for a year, as well as issuing it by law, in addition to allocating sums of revenue for spending on construction and reconstruction projects, internal security and social affairs. Pointing out that the budget bill arrived late in the constitutional deadline, which is at least two months before the end of the fiscal year, as the bill arrived on December 9, 2020.

Concerning the second axis, the report indicated that the committee studied the permissibility of accepting the draft budget, if it included a financing deficit between expenditures and revenues, and the secretariat was tasked with studying the constitutional and legal extent of accepting the draft budget, if it included a financing deficit, in addition to conducting an analytical study (legal and financial) to stand On the extent of the ability of the means specified by the draft law to finance the difference between expenditures and revenues, stressing that “after the committee reviewed the studies submitted, the legislation in force and some accounting circulars, it ended with the acceptance of the draft budget law as received from the government”.

The report identified two reasons for accepting the draft law: The first is the committee’s assessment of the implications of the Corona pandemic, especially since Article (12) of Federal Decree Law No. (26) of 2019 regarding public finances states that the general budget is the financial program for federal entities that includes their estimated financial resources. And public expenditures estimated to be spent for a particular fiscal year, in order to achieve economic and social development through the optimal distribution and efficient use of resources, within the framework of the federal strategy related to the expenditures expected to be spent by the federal authorities during the next fiscal year, provided that their balance is taken into account as revenues and expenditures, and their development in light of the financial strategy ( Financial framework) medium term.

The second is that the committee examined the means specified by the draft law to cover the difference between expenditures and revenues, and found that the first article of the draft law stipulates that the expected funding difference to maintain the balance of the Union’s general budget in the fiscal year 2021 project is dealt with through three procedures, namely the use of part of the account The government's cash reserve, issuance of public debt instruments, and controlling public budget expenditures, through procedures approved by the Council of Ministers.

The report indicated that the committee concluded after studying the effectiveness of these measures, because the decree-law regulated the rules and controls of the government's cash reserve, whose primary function is to support the annual budget, stressing that the committee valued the optimal use of the government's cash reserve to support the difference between expenditures and revenues.

Among the reasons, also, the committee made sure that the estimated budgets were not affected by any of the public services and benefits provided to citizens, after a study it conducted on the extent of the impact of the difference between expenditures and revenues on services and benefits provided to citizens, and comparing them with the estimated budgets of previous years.

3 recommendations

The Financial, Economic and Industrial Affairs Committee concluded with three main recommendations: The first is not to increase the rate of interest specified for loans that citizens receive from the Emirates Development Bank, as a result of using any of the public debt instruments.

The second is that the nationalization program and the provision of job opportunities in the public and private sectors that are included in group 28 are "other federal expenses" is not affected, in addition to the need to create a mechanism that is not currently in force, with regard to the budget of the Zakat Fund.

The "committee" examined the means specified by the draft law, to cover the difference between expenditures and revenues.

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