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Government nods to Bt66-bn budget for populist policies

As expected, the Cabinet quickly approved the huge Bt66-billion budget for its populist policies with the hope of winning majority support in the next general election.

The following are some of the 127 items proposed during the Cabinet’s last meeting yesterday:

Transport

The Cabinet put through the Bt14.9-billion budget proposed by the State Railway of Thailand (SRT) for the purchase of 50 diesel locomotives worth Bt6.56 billion, the refurbishment of 56 locomotives worth Bt3.56 billion as well as the procurement of 115 new commercial bogies for Bt4.98 billion.

“This is an urgent project and needs immediate approval. Otherwise, it could wait for another three or four months until the next government takes over,” deputy government spokesman Watchara Kannika said.

Transport Minister Sophon Saram said the Cabinet had also okayed the procurement of seven 300-seat Airbus carriers worth Bt31.26 billion for Thai International Airways’ provincial routes.

Farmers

The Cabinet has given the nod to a Bt5-billion budget to provide loans to flood victims. The Bank for Agriculture and Agricultural Cooperatives (BAAC) expanded its credit coverage to include fishermen in the South last year at an interest rate of MRR-3.

The Islamic Bank of Thailand has added another Bt887.56 million to its funds for self-employed groups affected by flooding last year, while those who applied for loans by February this year are eligible for additional financing.

State banks will also provide credit to people who have been affected by natural disasters this year. The BAAC has set aside Bt2 billion to support farmers, while fishermen will be provided loans at the rate of MRR-3 for the first two years. The current MRR rate stands at 7 per cent per annum.

The bank will charge private firms MLR-3 (the current minimum lending rate is 5 per cent annually) and individuals at MRR-3 for the first two years. These interest rates apply to loans worth no more than Bt10 million.

The BAAC will provide loans that are up to 80 per cent of collateral value, while directors of private companies are required to provide a personal guarantee.

SMEs

The government has set aside Bt100 million to provide an interest rate subsidy, while the Small and Medium Enterprise Development Bank of Thailand is providing Bt2 billion to support entrepreneurs affected by flooding and landslides. Under this programme, the victims would be eligible for a two-year loan at MLR-3 per annum for no more than Bt10 million.

The government will also provide a subsidy of 0.75 per cent per annum to the Small Business Credit Guarantee, which will guarantee these loans for two years.

The Small and Medium Enterprise Development Bank of Thailand will also provide loans to victims of last year’s political violence who have not yet been compensated by their insurers.

The Cabinet yesterday approved the Finance Ministry’s proposal to give more credits to traders affected adversely by the political riots, the Fiscal Policy Office said.

The SME bank will increase its credit line to Bt50 million per applicant, up from the previous Bt5 million. This is part of the bank’s existing Bt2-billion scheme designed to help victims of the prolonged red-shirt protest. The loan scheme, which expired last December, will be extended to June 30.

For eligibility, borrowers should already have filed a lawsuit against the insurer. The first Bt5 million will be provided right away, though a collateral or personal guarantee would be needed for amounts beyond that.

Meanwhile, the Small Business Credit Guarantee will reduce its yearly loan guarantee fee to 1 per cent in the first year, and set it at 1.75 per cent for the second to sixth year of loan.

Energy

The Energy Regulatory Commission of Thailand has approved an increase in fuel adjustment to 8.93 satang per unit in line with rising oil and gas prices, which will bring electricity up to Bt3.23 per unit.

To absorb the rising cost of electricity, the office is also planning to call back the Bt2.6 billion that had been put aside for the Electricity Generating Authority of Thailand (Egat), Provincial Electricity Authority (PEA) and Metropolitan Electricity Authority (MEA). Without this funding, the office would have had to increase its FT by 13.78 satang per unit.

The Cabinet has also given the nod to a Bt31.17-billion budget for PEA’s ninth transmission line and electricity station development plan as well as My-Kok Dam hydropower project worth Bt2.74 billion as requested by the Energy Ministry.

Public facilities

The Cabinet also approved an additional Bt382 million for constructing an international convention centre in Chiang Mai.

Source: The Nation

ThaiVest Editorial Team