Premier Wen Jiabao issued a stern warning against white elephant projects and corruption yesterday as he forecast slowing growth in fiscal income and rising pressures on expenditure.
'We must ensure proper supervision over all newly launched government-funded projects,' he told the plenary session of the National People's Congress.
'Under no circumstances should [we] launch any white-elephant projects which produce no material benefit except for burnishing government images; and by no means should publicly funded projects be used for private gains for any individual and government department.'
In its annual fiscal budget handed over to the NPC for reading and approval, Beijing proposed a national fiscal income growth rate of just 8 per cent this year, much lower than the realised 19.5 per cent last year and meagre compared with the average of more than 30 per cent growth rates over most of the past decade.
Jia Kang, of the Chinese Academy of Social Sciences, said fiscal operations had apparently evolved to a stage demanding frugality.
Beijing estimated that its domestic value-added tax, which made up 22.7 per cent of total central government fiscal income last year, would grow at 7.9 per cent this year, compared with 16.3 per cent a year ago.
Growth in corporate income tax, which made up 21.3 per cent of central government fiscal income last year, would slow from 27 per cent to 6 per cent.