DHAKA: China is making it harder for its regional governments to get ad hoc cash transfers from central authorities in another step to reform its fiscal system and reduce wasteful public spending.

China’s central government regularly transfers cash to regional authorities via fiscal transfers to ease their financial burden, as they are responsible for nearly 80 percent of all public spending but get only half of the fiscal income.

Yet these transfers are sometimes abused by local governments, which submit unnecessary investment projects to the central government for approval to get the money that is disbursed under special transfers.

The central government dispenses cash to regional authorities through either special or general transfers, reports The Straits Times.

BDST: 1617 HRS, FEB 02, 2015