Chapter 7 Public Budget in Egypt PDF

Chapter 7 Public Budget in Egypt Dr/Dalia Farouk  In Egypt, the key players in the budgetary process include: a. The Prime Minister's Office, which is responsible for overall economic development and for setting sector priorities and the accompanying budget allocation, b. The Ministry...

Chapter 7 Public Budget in Egypt Dr/Dalia Farouk  In Egypt, the key players in the budgetary process include: a. The Prime Minister's Office, which is responsible for overall economic development and for setting sector priorities and the accompanying budget allocation, b. The Ministry of Planning (MOP), which prepares the investment budget; C- The Ministry of Finance( MOF), which is responsible for the preparation and implementation of fiscal and budget policies; D- The line ministries, which are responsible for implementing sector policies within the budget resources allocated to them.  The fiscal year in Egypt runs from 1 July to 30 June. The budget process has five main stages: 1. Negotiations: Conducted at the working level among the governorates, ministries ,and the MOF, completed by end-December each year. 2. Consolidation: Undertaken by the the Prime Minister's – a draft consolidated budget is submitted to the parliament (the legislature) by end-April. 3. Modification: After discussions and modifications, final approval by the parliament takes place prior to end-June. 4. Implementation: Disbursing and monitoring of budget allocations occur over the course of the fiscal year. 5. Review: Budget execution is reviewed by the Central Accounting Office.  Example 1 If you have the following data for Egyptian public budget. Required: 1- calculate Gross operating balance ( 2010-2015)? 2- Explain how the government should act in this situation from your point of view? 3-calculate the percentage of balance to Gdp for 2015, if Gdp 2015= 680 million pounds ? 4-Who is responsible for preparing the previous public budget? 5-Who is responsible for reviewing budget execution?  Data in millions 2010 2011 2012 2013 2014 2015 Taxes 170.49 192.07 207.41 251.12 260.29 305.96 Compensation of 85.37 96.27 122.82 142.96 163.58 181.31 employees User charge 4.33 1.32 10.10 5.21 95.87 25.44 IG (Constructions) 28.90 31.36 30.80 34.98 41.07 50.28 Donations 0.00 0.00 0.00 0.00 0.00 0.00 Interest 72.33 85.08 104.44 146.86 173.15 193.01 Use of goods and services 28.06 26.15 26.83 26.65 27.25 31.28 (supply goods) Grants 4.38 5.14 5.31 5.01 5.19 6.21 Debt Finance 93.29 71.90 86.11 94.00 100.60 133.80 Subsidies 94.11 111.69 134.96 170.80 187.66 150.20 Social benefits 4.48 6.12 9.37 20.78 35.20 41.04  Answer 1-calculate Gross operating balance ( 2010-2015) 2010 2011 2012 2013 2014 2015 Revenue 268.11 265.29 303.62 350.32 456.78 465.24 Taxes, user charge ,donations ,debt finance Expense 317.64 361.99 435.07 548.17 648.63 671.60 Compensation of employees, IG, interest, supply goods , grants, subsides ,social benefits Gross operating -49.52 -96.70 -131.45 -197.85 -191.85 -206.36 balance 2- Explain how the government should act in this situation from your point of view? Answer In years (2010-2015) projected expenditures exceed the amount of expected revenues. This situation is known as budget deficit. Government Treatment of budget deficit: A- cutting the budget expanses by decreasing public spending or increasing taxes. B- borrowing or seeking for international assistance. 3-the percentage of balance to Gdp for 2015= 𝟐𝟎𝟔.𝟑𝟔 x100=30.3% 𝟔𝟖𝟎 4- The Ministry of Finance 5- The Central Accounting Office.