Outlays to bolster regional economies will be slashed by 40 percent in the fiscal 2014 draft budget to ¥610 billion, Finance Minister Taro Aso and internal affairs minister Yoshitaka Shindo agreed Saturday.
The general account budget will meanwhile swell to a record-high ¥95.88 trillion, they said.
Reducing regional outlays for a second consecutive year would shrink tax allocations to local governments by ¥170 billion to around ¥16.89 trillion. The Cabinet of Prime Minister Shinzo Abe plans to approve the draft budget Tuesday.