Not only does the Fiscal Investment and Loan Program -- the government's "second budget" -- need to be trimmed but it also needs to sever its financial life support to problematic entities such as the Japan National Railways Settlement Corp., an advisory body said July 23.

An interim report released by a special panel under the Fund Operation Council, an advisory body to the finance and posts and telecommunications ministers, said a further whittling down of the program, dubbed "zaito," was necessary to match the government's fiscal reconsolidation efforts.

The panel said the general zaito program needs further trimming in the fiscal 1998 budget, the compilation of which will start in earnest after individual ministries and agencies submit their budget requests next month. The program came to 39.33 trillion yen in the current fiscal year, down 3 percent from the initial budget levels of the previous year.