A Cabinet committee endorsed a plan Monday to earmark more than ¥1 trillion for stimulus growth measures in the fiscal 2011 budget, instead of the ¥2 trillion the ruling Democratic Party of Japan has urged the government to allocate for such measures.
The draft also urges each ministry and agency to cut back on requests for policy-related spending in the fiscal year starting next April by 10 percent to squeeze out funds for the special allocation.
Curbing government spending and issues of new government bonds are a huge political challenge for Prime Minister Naoto Kan, who has repeatedly warned that the debt-laden government could face a fiscal crisis similar to the one that hit Greece.