National Budgets | 9 | Economic Development in East Asia

ABSTRACT

Government budgets display clearly the broad patterns or general lines of development in the respective countries, though detailed analysis is complex and there is no space here for the explanations and qualifications required to sustain any finely focused conclusions. Particulars for nine countries are given in Table 8.1, co-ordinated as far as possible into comparable general headings. This Table confronts the reader with rather a massive amount of indicative evidence, which should, however, appear more digestible when he looks beyond it to the statement of general inferences which follows. Table 8.1 reviews the expenditures and receipts, by main headings; taking a stated base-year (for which the actual amounts are specified) it proceeds to give for subsequent years (a) index numbers of the growth of each head of revenue or expenditure, and (b) for all years the percentage distribution of the totals between these heads. This is to bring out primarily the increase in receipts or expenditure under each head, and the changing relative (financial) importance of each type of governmental activity, illustrating the trends of the intentions or performance of governments in each of the respects indicated. 2 Ceylon (1951 = 100) https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1951

1954

1958

1964

million Rs

(=100)

(%)

index

(%)

index

(%)

index

(%)

Expenditures:

Interest on public debt

21.4

(2%)

168

(4%)

180

(3%)

519

(5%)

Food subsidies

131.6

(15%)

(2%)

(8%)

207

(13%)

Current transfers to local governments

18.5

(2%)

123

(3%)

176

(2%)

210

(2%)

Other transfer payments

66.2

(7%)

102

(7%)

246

(11%)

259

(8%)

Current, on goods and services

383.6

(43%)

123

(47%)

178

(47%)

246

(47%)

Gross fixed capital formation

243.5

(27%)

113

(30%)

165

(28%)

246

(30%)

Loans and advances (net)

31.9

(4%)

181

(6%)

(1%)

100

(2%)

Total expenditure

896.7

(100%)

105

(100%)

161

(100%)

242

(100%)

Expenditures:

of which: Social services

280.6

(31%)

126

(35%)

184

(36%)

263

(36%)

Economic services

309.2

(34%)

104

(32%)

163

(35%)

137

(21%)

Defence

9.7

(1%)

324

(3%)

661

(4%)

692

(4%)

Receipts:

Taxes on income and wealth

144.3

(17%)

160

(24%)

(26%)

228

(20%)

Export duties

282.7

(34%)

(26%)

115

(30%)

109

(19%)

Import duties

245.0

(29%)

100

(24%)

119

(27%)

199

(29%)

Other indirect taxes

84.6

(10%)

119

(11%)

175

(13%)

365

(19%)

Fees and charges

57.7

(7%)

128

(4%)

156

(8%)

234

(6%)

Other receipts

24.1

(3%)

153

(3%)

154

(4%)

359

(3%)

Total receipts

838.4

(100%)

113

(100%)

140

(100%)

197

(100%)

3 India: (a) Centred Government https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

(Index 1956=100)

1956

1960

1965

million Rs

(= 100)

(%)

index

(%)

index

(%)

Expenditures:

Interest on public debt

837

(8%)

195

(9.5%)

367

(9%)

Subsidies

13 ^a

(0%)

1,085 ^b

(1%)

2,154 ^b

(1%)

Grants to States

875

(9%)

185

(9%)

310

(8%)

Other grants

356

(4%)

215

(5%)

373

(4%)

Current, goods and services

2,852

(28%)

158

(24%)

378

(30%)

Gross capital formation

1,667

(16%)

178

(14%)

364

(18%)

Capital transfers to State and public corporations

322

(3%)

148

(3%)

249

(3%)

Others transfers

138

(1%)

(0%)

163

(0%)

Loans for capital formation

2,918

(29%)

168

(24%)

262

(21%)

Loans, other

(0%)

594

(2%)

1,548

(3%)

Other capital expenditure

(0%)

4,326

(9%)

5,085

(5%)

Total expenditure

10,061

(100%)

188

(100%)

354

(100%)

of which, defence

1,916

(19%)

146

(15%)

446

(24%)

Receipts:

Taxes on personal incomes

762

(12%)

(7%)

186

(6%)

Corporate income tax

370

(6%)

288

(10%)

827

(13%)

Other taxes on income and wealth

(0%)

1,800

(1%)

1,912

(0%)

Export duties

387

(6%)

(2%)

(0%)

Import duties

1,280

(18%)

106

(13%)

256

(14%)

Other indirect taxes

1,306

(20%)

226

(28%)

498

(28%)

Government enterprises

1,109

(17%)

139

(15%)

262

(13%)

Other property, etc.

466

(7%)

266

(11%)

502

(10%)

Fees and misc.

460

(7%)

126

(6%)

130

(3%)

Repayment of loans

341

(5%)

291

(9%)

835

(12%)

Other capital receipts

119

(2%)

(0%)

Total receipts

6,608

(100%)

163

(100%)

351

(100%)

Notes: a

1957 (1956 : nil).

1957= 100.

India: (b) State Governments https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954

1960

1965

million Rs

(=100)

(%)

index

(%)

index

(%)

Expenditures:

Education

748

(12%)

218

(13%)

411

(15%)

Health

336

(5%)

220

(6%)

380

(5%)

Agriculture and Industry

816

(13%)

244

(16%)

458

(18%)

Other current expenditure

2,272

(37%)

161

(21%)

283

(32%)

Capital expenditure : Multi-purpose river valley and irrigation schemes

824

(13%)

159

(10%)

223

(9%)

Electricity

203

(3%)

122

(3%)

229

(2%)

Industrial development

(1%)

444

(1%)

820

(2%)

Buildings and roads

155

(2%)

603

(7%)

915

(7%)

Other

475

(8%)

153

(6%)

250

(5%)

Loans and advances (net)

271

(4%)

378

(9%)

902

(10%)

Total expenditure

6,144

(100%)

203

(100%)

362

(100%)

Note: Not included in the above are the profits and losses made by State trading schemes. These varied very irregularly, as follows (+indicates profit, -indicates loss):

1952: +251

1958: +158

1961: +192

1964: +71

1954: -134

1959: -4

1962: -96

1965: -23

1957: -47

1960: +70

1963: +123

Total: +561

Showing a very small and uncertain profit over the whole thirteen years.

Receipts:

Personal income tax

608

(13%)

145

(10%)

196

(8%)

Land tax

707

(15%)

137

(11%)

168

(11%)

Estate duty

24 ^a

(0%)

113 ^b

(0%)

167 ^b

(0%)

Excise

606

(13%)

200

(14%)

351

(14%)

Turnover tax

583

(12%)

190

(12%)

434

(12%)

Other taxes

798

(17%)

168

(15%)

304

(15%)

Other receipts

1,386

(30%)

241

(38%)

436

(38%)

Total expenditure

4,689

(100%)

189

(100%)

332

(100%)

Note: a

1957 : previously none.

1957=100.

4 Indonesia Owing to changes in classification and other factors, two periods are distinguished. https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

(i) 1953–58

1953

1958^e

million Rupiah

(=100)

(%)

index

(%)

Expenditures:

Education

858

(6%)

203

(5%)

Health

184

(1%)

339

(2%)

Other social services

204

(1%)

254

(1%)

Economic services

1,579

(10%)

(4%)

Communications, public works, public works power

938

(6%)

138

(4%)

Defence

3,269

(21%)

339

(31%)

Other expenditure

7,914

(51%)

236

(53%)

Total, gross expenditure

15,568

(100%)

227

(100%)

Less: ‘revenue directly related to expenditure’

3,383

107

Total, net expenditure

12,185

260

Receipts:

Taxes on personal income

874

(9%)

227

(10%)

Corporation income tax

1,084

(11%)

180

(10%)

Other direct taxes

(1%)

406

(4%)

Export duties

1,049

(10%)

(1%)

Import duties

1,295

(13%)

127

(8%)

Excise

1.366

(13%)

259

(18%)

Other indirect taxes

736

(7%)

188

(7%)

Foreign exchange levies

1,914

(19%)

347

(34%)

Revenue from public enterprises

205^e

(2%)

(1%)

Other receipts

1,618

(16%)

118

(10%)

Total receipts

10,208

(100%)

193

(100%)

https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

(i) 1953–59

1953

1959

million B

Receipts:

(= 100)

(%)

index

(%)

Taxes on income and wealth

266.3

(7%)

161

(7%)

Import duties

1,047.3

(27%)

172

(30%)

Export duties

214.8

(5%)

190

(7%)

Other indirect taxes

1,373.9

(35%)

115

(26%)

Profits of Rice Bureau

322.0

(8%)

235

(12%)

Fiscal monopolies

387.9

(10%)

(5%)

Other receipts

317.0

(8%)

242

(13%)

Total receipts

3,929.3

(100%)

154

(100%)

Korea: South https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

(ii) ([0-9]+)-([0-9]+)

Taxes on income and wealth

428.0

(7%)

246

(10%)

395

Import duties

1,805.6

(30%)

131

(23%)

226

Export duties

408.6

(7%)

(3%)

159

Rice export premium

755.9

(13%)

106

(8%)

Fiscal monopolies

319.4

(5%)

150

(5%)

124

Other indirect taxes

1,604.6

(26%)

249

(38%)

291

Fees, sales and other charges

379.6

(6%)

126

(5%)

Profits and dividends

209.5

(3%)

177

(4%)

Other receipts

125.5

(2%)

465

(5%)

Total receipts

6,036.7

(100%)

173

(100%)

266

5 Korea: South https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954

1960 ^e

1964 ^a , ^e

000 million

hwan

Expenditures:

(= 100)

(%)

index

(%)

index

(%)

Interest on public debt

0.4

(1%)

1,200

(1%)

2.700

(1%)

Price subsidies

.. ^b

Current transfers to :

Private sector

3.0

(5%)

450

(3%)

1,730

(7%)

Provinces and local bodies

5.3

(9%)

1,343

(17%)

2,198

(15%)

Abroad

—

.. ^c

Current expenditure on goods and services

41.4

(69%)

515

(52%)

850

(46%)

Capital formation

1.0

(2%)

3,720

(9%)

11,200

05%)

Capital transfers to :

Private sector

2.4

(4%)

113

(1%)

150

(0%)

Provinces and local bodies

0.8

(1%)

3,437

(7%)

4,175

(4%)

Direct lending

5.7

(9%)

604

(8%)

1,161

(9%)

Total expenditure

59.9

(100%)

680

(100%)

1.267

(100%)

of which :

Education

1.4

(2%)

4,157

(4%)

7,929

(15%)

Health

0.4

(1%)

1.175

(1%)

2.175

(1%)

Social security, etc.

1.7

(3%)

1,094

(5%)

2,929

(7%)

Economic services

11.7

(20%)

635

(18%)

1.876

(29%)

National defence

32.6

(54%)

433

(35%)

698

(30%)

Notes a

From 1962 the currency unit became the won (1 won=1O hwan): the 1964 figures are here converted to ‘old hwan’ i.e. the same basis as the preceding years.

Disclosed in the following years: 1958, 8.7; 1959, 6.1; 1960 ^e , 1.2; 1960, 2.6; 1961, 2.1; 1962, 2.2; 1963 ^e , 0.9; 1964 ^e , 0.6; price subsidies were thus generally a small and falling percentage of the expenditures.

transfers abroad were: 1958, 1.2; 1959, 1.5; 1960, 2.4; 1960, 0.4; 1961, 6.5; 1962, 7.6; 1963 ^e , 4.4; 1964 ^e . 6.7; thus an insignificant percentage (about 1 per cent).

Estimates.

https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954

1960 ^e

1964^a, ^e

000 million

hwan

Receipts:

(= 100)

(%)

index

(%)

index

(%)

Taxes on income and wealth

7.1

(18%)

921

(21%)

1,532

(20%)

Customs duties

3.5

(9%)

1,174

(13%)

2,223

(14%)

Foreign exchange levies

—

.. ^d

(15%)

—

Monopoly profits

4.0

(10%)

638

(8%)

1,528

(11%)

Other indirect taxes

10.4

(26%)

849

(28%)

1,570

(30%)

Net surplus from government enterprises

.. ^f

(2%)

.. ^f

(3%)

Income from property

2.2

(5%)

309

(2%)

977

(4%)

Other current receipts and other (net) capital receipts

13.1

(33%)

244

(10%)

288 215

(7%) (7%)

Total domestic receipts

40.3

(100%)

771

(100%)

1,340

(100%)

Foreign grants

2.7

(7%)

1,696

(15%)

8,155

(41%)

Total receipts

43.0

829

1,768

Notes d

Foreign exchange levies were applied from 1958. In 1958 they yielded 14.3; in 1959, 47.2; in 1960 ^e , 45.6 (in 1960 actual, 50.5); in 1961, only 2.5; in 1962, only 8; 1963 they ceased to be levied. As percentages of the total receipts for the years just cited, they were thus: 1958, 7 per cent; 1959, 18 per cent; 1960 ^e , 15 per cent; 1960 actual, 16 per cent; 1961, 1 per cent; 1962, insignificant.

Estimates.

Declared from 1957; forming a small, though generally rising, proportion of total receipts (about 1 per cent in 1957, about 3 per cent in 1964).

6 Malaysia https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1953

1960

1964^e

million M$

Expenditures:

(=100)

(%)

index

(%)

index

(%)

Interest on public debt

13.6

(1.5%)

382

(5%)

649

(6%)

Education

78.2

(8.5%)

211

(16%)

342

(17%)

Health

48.6

(5%)

155

(7%)

210

(7%)

Defence

210.1

(23%)

(8.5%)

135

(18.5%)

Other current

364.9

(40%)

117

(40%)

(22%)

Capital expenditure

200.4

(22%)

124

(23%)

225

(29%)

Total expenditure

915.8

(100%)

115

(100%)

167

(100%)

Receipts:

Taxes on income and wealth

164.2

(25%)

118

(17%)

182

(23%)

Export duties

112.2

(17%)

232

(23%)

370

(32%)

Import duties

198.3

(30%)

178

(31%)

(12%)

Other indirect taxes

68.2

(10%)

158

(9%)

277

(15%)

other receipts

117.1

(18%)

199

(21%)

192

(17%)

Total receipts

660.0

(100%)

174

(100%)

195

(100%)

7. Pakistan: (a) Central Government https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954

1960

1965^e

million Rs

Expenditures:

(=100)

(%)

index

(%)

index

(%)

Interest on public debt

59.5

(3%)

306

(5%)

612

(5%)

Defence

768.7

(38%)

125

(28%)

142

(16%)

Education and health

17.8

(1%)

324

(2%)

253

(1%)

Transfers to Provinces and States:

Taxes

176.4

(9%)

170

(9%)

541

(14%)

Grants

43.5

(2%)

(1%)

Other

current expenditure

344.0

(17%)

138

(14%)

375

(18%)

Capital expenditure

223.0

(11%)

433

(28%)

425b

(13%)

Loans and advances to:

Provinces and States (net)

335.9

(17%)

130

(12%)

601

(29%)

Others (net)

23.3

(1%)

267

(2%)

1,212

(4%)

Total expenditure ^a

1,992.1

(100%)

175

(100%)

353

(100%)

Notes a

The following transactions are not included in the above. ‘Currency capital outlays’: none in 1954, 1962 and 1965, 62.2 in 1960, 10.6 in 1961, 16.8 in 1963, and 9.8 in 1964, all negligible percentages of total expenditure, except 1960 which was about 3 per cent. And net expenditure on State trading schemes; these realized a gain of 310.4 in 1954, offsetting no less than 15 per cent of the total expenditure declared in the budget, and were in balance (no net loss or profit) in 1962 and 1963; but returned the following losses in other years. 33.4 in 1960 and 52.1 in 1961 (i.e. about 1 per cent of the total expenditure in the budget), falling to (estimated) 16.3 in 1964 and 17.6 in 1965, which are much less than 1 per cent d the total budgeted expenditure. See also under State Governments, below. bThis had declined, however, to index 296 in 1961, 350 in 1962, 226 in 1963 and 297 in 1964. The irregularity of capital expenditure was thus extreme, between nearly Rs. 1,000 million in 1960 (28 per cent d all expenditures) and about half that figure in 1963 (10 per cent of all expenditures).

https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954

1960

1965^e

million M$

Receipts:

(=100)

(%)

index

(%)

index

(%)

Taxes on income :

Personal

145.8

(11%)

183

(12%)

323

(13%)

Corporation

61.7

(5%)

153

(4%)

267

(5%)

Customs

440.8

(33%)

127

(26%)

205

(26%)

Excise

169.5

(13%)

200

(16%)

472

(23%)

General turnover tax

157.9

(12%)

197

(14%)

464

(21%)

Other taxes

33.1

(2.5%)

145

(2%)

(1%)

Other receipts

309.4

(23%)

171

(25%)

135

(12%)

Total receipts :

1,318.2 i

(100%)

163

(100%)

267

(100%)

Pakistan: (b) State Governments https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954

1960

1965^e

million Rs

Expenditure:

(=100)

(%)

index

(%)

index

(%)

Education

81.9

(10%)

191

(10%)

452

(7%)

Health

37.7

(4%)

122

(3%)

313

(2%)

Other current

453.1

(53%)

188

(53%)

455

(37%)

Capital

254.3

(30%)

144

(23%)

475

(22%)

Loans and advances (net)

29.8

(3%)

919

(12%)

605

(32%)

Total ^a

856.9

(100%)

188

(100%)

649

(100%)

Notes a

As in Central budget, this excludes the results of State trading schemes. The part of these relating to the Central budget was noted in the relevant Table immediately above. Here we must add the part relevant to the state budgets; as follows. Overall losses or profits were registered in the following years :

https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

million Rs

index

% of State expenditure in budget

LOSSES

1952

170.4

100

20%

1963

88.6

1965^e

83.7

PROFITS

1960

27.3

100

1961

207.7

761

10%

1962

68.8

252

1964^e

259.1

949

^e Estimates

https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

Receipts:

Personal income tax

13.7

(2%)

518

(6%)

1,708

(8%)

Corporation tax ^b

. .

(3%)

Land tax

114.7

(18%)

218

(21%)

268

(11%)

Customs duties

59.2

(9%)

(4%)

152

(3%)

Other taxes

192.6

(30%)

210

(35%)

448

(31%)

Other receipts

264.1

(41%)

151

(34%)

460

(43%)

Total receipts ^c

644.3

(100%)

182

(100%)

433

(100%)

Notes b

Specified for 1963, 49.5 (2 per cent of total receipts) and 1964, 63.0 (2 per cent).

Excludes loans from the Central Government.

8 <italic>Philippines</italic> (index 1961 = 100) https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954^a

1961

1965^e

million P

index

(%)

(= 100)

(%)

index

(%)

Expenditures:

Interest on public debt

(2%)

29.8

(2%)

241

(3%)

Subsidies

. .

31.5

(2%)

237

(3%)

Other current transfers

. .

117.8

(9%)

(4%)

Current, on goods and services

. .

868.8

(63%)

180

(64%)

Gross capital formation

. .

250.1

(18%)

145

(15%)

Capital transfers

. .

41.9

(3%)

573

(10%)

Direct lending

. .

38.8

(3%)

(2%)

Total expenditure :

(100%)

1,378.0

(100%)

178

(100%)

of which :

Education

(25%)

377.4

(27%)

164

(25%)

Other social services

(5%)

143.0

(10%)

116

(7%)

Agriculture and national resources

(5%)

127.9

(9%)

337

(18%)

Transport and communication

(25%)

265.5

(19%)

138

(15%)

Other economic services

(9%)

103.1

(7%)

145

(6%)

National defence

(23%)

196.6

(14%)

158

(12%)

Other services

(9%)

164.5

(12%)

253

(17%)

(100%)

https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

1954

1961 ^a

1965 ^c

million P

index

(%)

(= 100)

(%)

index

(%)

Receipts:

Taxes on income

(16%)

278.2

(22%)

211

(27%)

Import duties

(17%)

326.4

(26%)

165

(25%)

Foreign exchange tax

79O

(19%)

16.0

(1%)

— ^b

—

Excise

(15%)

190.7

(15%)

189

(16%)

Other taxes

(28%)

299.5

(24%)

234

(32%)

Less: tax receipts apportioned to local government

(7%)

116.4

(9%)

238

(13%)

Other receipts

(12%)

268.2

(21%)

102

(13%)

Total receipts

(100%)

1,262.6

(100%)

173

(100%)

Notes a

Expenditure for 1954 not revealed, except interest on public debt and total expenditure.

Ceased in 1964 and 1965.

Estimates.

9 Thailand Two bases of classification are available, for two successive periods. https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

(i) 1953-59

1953

1959

Expenditure:

million B (=100)

(%)

index

(%)

Interest on public debt

74.8

(1%)

357

(4%)

Public health and social welfare

206.7

(4%)

229

(7%)

Education

300.7

(6%)

439

(20%)

National defence

961.0

(19%)

150

(22%)

Economic development

724.3

(14%)

209

(23%)

Government employees' cost of living allowances

1,833.6 ^a

(35%)

—

Other expenditure

1,064.5

(21%)

646

(24%)

Total expenditure of which,

5,165.6

(100%)

128

(100%)

capital expenditure

1,035.7

(20%)

123

(19%)

Note a

This entry reached 2,273.5 in 1956 (24 per cent increase over 1953) but ceased from 1957.

https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

Receipts:

Taxes on income and wealth

266.3

(7%)

161

(7%)

Import duties

1,047.3

(27%)

172

(30%)

Export duties

214.8

(5%)

190

(7%)

Other indirect taxes

1,373.9

(35%)

116

(26%)

Profits of Rice Bureau

322.0

(8%)

235

(12.5%)

Fiscal monopolies

387.9

(10%)

(5%)

Other receipts

317.0

(8%)

242

(13%)

Total receipts:

3,929.2

(100%)

154

(100%)