The government on Wednesday agreed on basic guidelines for a 15-month combined budget ending in March 2000 that will include 4 trillion yen worth of spending concentrated in special budgetary frames to boost the economy.

The guidelines — which cover the 10 trillion yen second supplementary budget for the current fiscal year and the annual budget for fiscal 1999 — were to be finalized later in the day upon Cabinet approval.

After approval, government ministries and agencies will submit their requests to the Finance Ministry by the end of the month for normal allocations. Those in the special budgetary frames, however, have until the end of October.

The ministry will screen the requests by the end of the year.

According to the guidelines, the belt-tightening Fiscal Structural Reform Law will be frozen so that budget caps for key government expenditures can be removed.

Overall, total general expenditures — the policy-related portion of the budget — for the supplementary and fiscal 1999 budgets are expected to rise more than 10 percent over the initial 44.53 trillion yen fiscal 1998 budget figure, government officials said.

During their meeting Wednesday afternoon, Prime Minister Keizo Obuchi, Finance Minister Kiichi Miyazawa and Chief Cabinet Secretary Hiromu Nonaka agreed to set aside 4 trillion yen in a special fund to help cope with the immediate aspects of the economic crisis, Nonaka told reporters.

Specifically, the government will spend 2.7 trillion yen on infrastructure projects and 1.3 trillion yen on nonconventional public works projects meant to upgrade social welfare and education and help small and medium-size firms.

In addition, a special allocation worth 150 billion yen has been earmarked for infrastructure projects in telecommunications, science and technology, and the environment.

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