Local govt revenues fall short of expectations in first 5 months

The fiscal revenues of some local governments were lower than expected in the first five months of 2013 due to China's economic slowdown, the 21st Century Business Herald newspaper reported Wednesday.

In the first five months of 2013, provinces and regions such as Liaoning, Jilin, Shaanxi and Inner Mongolia failed to meet their targets for fiscal revenue growth set earlier for 2013, the report said.

For instance, North China's Inner Mongolia Autonomous Region saw only a slight fiscal revenue increase of 0.1 percent year-on-year between January and May 2013, way much lower than the annual goal of 14 percent growth set by the local government.

Beijing-based Anbound Consulting said in a report published Monday on caijing.com.cn that increased debt pressure and deterioration of government revenues will harm local governments, which may cause local economic and social problems.

However, Li Wenpu, deputy dean of the School of Economics at Xiamen University, was quoted by the newspaper as saying that the slowing fiscal revenue growth was not bad, because controlling the speed of fiscal revenue growth would help to improve people's income.

Local governments will also get a fiscal transfer from the central government, so their fiscal revenues will be in balance with their expenditures over the whole year of 2013, Shi Shengrong, director of the Research Institute for Fiscal Science in Inner Mongolia, told the newspaper.

It is necessary for local governments to cut fiscal expenditures, especially the "three public consumptions" - overseas travel, receptions and official cars - as well as administrative and investment expenditures, the paper quoted Hao Ruyu, vice chairman of the Financial and Economic Committee of the National People's Congress, as saying.