The government plans to establish new grants worth ¥1.1 trillion for local governments under the fiscal 2010 state budget to replace existing subsidies for sewerage, road and other projects, sources said Saturday.
The step is intended to help local governments finance projects more freely, the sources said. Unlike subsidies, whose use is limited to specific projects, the use of grants is left to municipalities' discretion.
The Finance Ministry plans to set the size of grants from the Land, Infrastructure, Transport and Tourism Ministry at ¥1 trillion and from the Agriculture, Forestry and Fisheries Ministry at ¥100 billion, the sources said.