Spending from the general account of the fiscal 2012 budget will likely be trimmed to just over ¥90 trillion — about ¥2 trillion less than what was initially provided for 2011, government sources said Saturday.
Expenditures from the general account exclude costs related to reconstruction from the March earthquake and tsunami that devastated the northeast.
The initial budget for fiscal 2011 was ¥92.41 trillion, making it likely the 2012 budget will mark its first decline from the preceding year's budget in six years.
The government was at first projecting around ¥93 trillion for the general-account portion of the initial 2012 budget but will trim that because it is planning to provide about ¥2.6 trillion needed to shoulder its 50 percent share of funding for the basic pension program by other means, the sources said.
Nonetheless, the plan for the initial budget means that, for the third consecutive year, tax revenue will be less than the amount of government bonds to be issued — a situation likely to leave many people concerned about the country's fiscal health.
The government is considering allocating about ¥22 trillion for debt-servicing costs alone, the sources said.
Nontax revenue is likely to come in between ¥3.5 trillion and ¥4 trillion, they added.
On Friday, the government adopted its budget guidelines for fiscal 2012, which begins next April 1. According to the outline, spending will be limited to about ¥68.4 trillion, excluding debt-servicing costs and the roughly ¥2.6 trillion being set aside for pension contributions.