Peru’s government is seeking to boost public spending on potable water and sewerage projects by 72% next year, the biggest annual increase in a decade.
The government, which will allocate half its 142bn-sol (US$42bn) budget to social services, aims to increase spending on health and education by 1.6bn soles next year and provide an additional 1.5bn soles for other infrastructure, cabinet chief Fernando Zavala said in a presentation to congress.
The 4.7% overall budget increase is part of President Pedro-Pablo Kuczynski’s goal to install connections for potable water and sewerage services for 100% of the population by 2023. Kuczynski’s administration took office on July 28.
“This is a budget with a social emphasis,” Zavala said in a statement. “The four major priorities are to improve access to public water services; improve security and the fight against corruption; improve education and health access and quality and increase infrastructure investment.”
The government also increased the budget for regional and municipal governments by 9.6%, the biggest annual increase since 2011, while seeking to eliminate bureaucratic obstacles to infrastructure projects, Zavala said.
The government, which will channel 40% of the budget to the regions, will bring forward the allocation of annual funds by eight months to March 31 at the latest from the previous November deadline, finance minister Alfredo Thorne said during the televised presentation.
The government, which is seeking special legislative powers to push through tax reforms, aims to jumpstart the economy and eventually increase tax revenues by investing more in infrastructure, Thorne said.
Tax collection fell 4.4% to 59.4bn soles through August, according to national tax service Sunat.
“We’ve been called optimists, but we believe we can grow 4.8% next year and from 2018 onwards jump to 5% and maintain that 5% growth through 2021,” Thorne later told Lima-based Radioprogramas.
Kuczynski, who won the June elections but garnered only 18 seats in the 130 member congress, has pledged to work to eliminate all bureaucratic obstacles to US$25bn in delayed infrastructure projects.
Kuczynski’s predecessor Ollanta Humala awarded a record US$20bn in public-private partnership infrastructure concessions during his five year mandate, but bureaucratic issues and social conflicts have caused years of delays, according to industry groups such as SNMPE and AFIN.