"27% of Next Year's Budget for New Projects, Review Needed for Execution Feasibility and Preliminary Preparation"

Yejeongcheo to Publish '2021 Budget Overview Analysis' on 30th
"Need to Consider Measures for Efficient Fiscal Management"

Prime Minister Chung Sye-kyun is attending the plenary session of the Special Committee on Budget and Accounts held at the National Assembly on the 25th, responding to questions from lawmakers. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Jang Sehee] As the National Assembly review of the 2021 budget bill is set to begin next month, concerns have been raised that 26 (27%) of the new projects require reconsideration.

According to the '2021 Budget Bill Comprehensive Analysis' report by the National Assembly Budget Office on the 30th, the number of new projects in next year's budget bill is 490, with a total scale of 4.1188 trillion KRW. The office stated, "Among all new projects, 26 projects (27%) require legal basis establishment, appropriateness of budget calculation grounds, feasibility of execution within the year, and integration or linkage with existing projects."

Looking at the status of new projects, the industry, small and medium enterprises, and energy sectors had the largest scale at 1.2809 trillion KRW. This was followed by general and local administration sectors (754.5 billion KRW), research and development sectors (513.1 billion KRW), and social overhead capital (SOC, 424.2 billion KRW).

The Budget Office noted that some of these lack differentiation from existing projects. The Ministry of Science and ICT's 'Disease-Centered Translational Research Project' (1.83 billion KRW) is a research and development project aimed at developing treatments for diseases based on basic mechanism and exploratory research results. It was previously evaluated as inappropriate for promotion due to lack of differentiation from existing projects and insufficient linkage and cooperation plans, based on preliminary feasibility studies and technical evaluations, indicating a need for supplementation.

The Ministry of Agriculture, Food and Rural Affairs' Smart Farm Multi-Ministry Package Innovation Technology Development Project was allocated 17.784 billion KRW. This project aims to develop mid- to long-term industrial technologies related to smart farms. Although the Smart Farm Project Group oversees it, the project leader has only recently been selected, making the timeline tight for project commencement by April next year, casting uncertainty on timely implementation.

The Ministry of Trade, Industry and Energy's 'Power Semiconductor Production Platform Construction Project' (4 billion KRW) supports R&D, prototype production, and mass production of power semiconductors. While facility and equipment construction will be supported through grants, the legal basis for funding mass production facilities is unclear, requiring further discussion on the funding method.

There are also cases where project costs have been excessively estimated. The Ministry of Education's 'Artificial Intelligence (AI)-Based Learning Diagnosis System Construction Project' (9.176 billion KRW) plans to newly build AI learning diagnosis systems for elementary and middle schools and provide AI learning diagnosis systems for high schools. However, it was pointed out that indirect costs and labor costs in the budget for EBS content production projects need to be adjusted to an appropriate scale.

In this regard, the Budget Office advised, "Measures to prevent fiscal leakage and to improve the efficiency of fiscal management must be continuously considered."