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Report of the Economic Committee of the National Assembly on the Settlement of the State Budget 2010.

CUBA, 02 August 2011.-.Settlement report of the State Budget for 2010 presented by the Ministry of Finance and Prices, refers to the implementation process and the final figures of the budget approved by the National Assembly in session December 20, 2009.

On that occasion the Assembly approved the budget for 2010 by Law 108, which established a fiscal deficit not exceeding 3.5% of GDP, which in total was 2,202,600,000 pesos.

During the year all of the planned revenue was not obtained and therefore an increase of 263,900,000 pesos on the deficit approved was requested, reaching 3.8% of GDP. This request was approved by the State Council on December 15, 2010 and ratified by this Assembly on December 18.

The Settlement presented now accounts for a smaller deficit than that approved by 175,900,000 pesos which represents 3.6% of GDP, ie 0.2 percentage points lower than that approved.

These results confirm a trend towards an improved fiscal position after the deficit in 2008 grew to 6.7% of the GDP. In 2009 it reached 4.8% and in 2010 it was 3.6%, although there is potential for much improvement, both in raising revenues and reducing expenses and in general, in the process of budget execution. This was revealed by the comprehensive audit conducted for the first time of the budget system in fiscal 2010 and covered all the provinces, 5 agencies of the State Administration and the Ministry of Finance and Prices, with unsatisfactory results. This highlights the need for quality accounting and rigor in the process of developing and implementing the State budget are ongoing tasks for all agencies and mandatory subjects of systematic analysis by the National Assembly.

Expenses were under those approved by the Assembly, which shows the initial results of the more rational and savings policy, where we all know there is ample room for further reductions. Current expenditure of budgeted activity which represented 72% of the total expenses were 95.3%, representing 569,800,000 pesos less than what was approved.

The following aspects are highlighted:

The transfer of the pharmacies and optics to the business system, which until 2009 operated as budgeted units and recorded as expenses in the budget what they acquired for sale to the public. This represented 696 million pesos of cost reduction compared to 2009.

In energy, fuel and lubricants cut spending by 57,100,000 pesos compared to 2009.

In services, phone contracts, water, transportation and others saved 65,800,000 pesos compared to 2009.

Social Services spent 236,600,000 pesos less than in 2009 due to the review and clearance of the beneficiaries of it according to their real needs and possibilities. This did not stop in the Social Services, under the guidance of the Ministry of Labour and Social Security, spending 424,500,000 pesos to protect 235,482 people and Social Services under the responsibility of the Ministry of Public Health spending 192,600,000 pesos to ensure the functioning of 156 old age homes, 35 homes for physically and motor disabled, 233 households for senior citizens and delivered medicines and other services to people with insufficient incomes of 14,600,000 pesos.

Other issues the Commission wishes to stress are:

Spending 1,974,600,000 pesos to subsidize the difference between the sale price to the population of the products of the food basket and the price of buying them.

The allowance for losses reached 587,900,000 pesos and concentrated on the essentials to finance losses from previous years, with majority for the Sugar Ministry and the Local Organs of People's Power.

The provincial budget surplus reached 1,104, 200,000 pesos exceeding by 28% the planned level, with 9 territories with surpluses and the others with reductions in the deficit planned.

The report on the Settlement of the 2010 budget held by the deputies offers a comprehensive analysis, which shows progress in the planning, execution and control of the state budget, as well as the remaining deficiencies and the complex and essential battle to make budgetary discipline an inviolable principle and budgeting an essential tool for rigorous analysis aimed at increasing revenue and reducing costs without affecting the quality and coverage of production and service activities. In this complex battle for rationality of expenditure, savings and efficiency, the Provincial and Municipal Assemblies of People's Power have been increasingly involved in compliance with instructions issued by the President of the National Assembly on 21 May 2008.

The Economic Affairs Committee recommends that the Nation Assembly approve the Settlement Report of the State Budget for 2010 presented by the Ministry of Finance and Prices.

August 1, 2011
National Assembly of Popular Power
(Cubaminrex)

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