Karen Karapetyan: Government will continue efforts to introduce program-target method in Armenia`s budget process

ArmInfo. The Armenian government  continues to make efforts to introduce program budgeting in the  country. This was stated in the Armenian parliament on June 26 by  Prime Minister Karen Karapetyan, speaking at the discussion of the  report on the implementation of the state budget for 2016 in the  permanent commissions of the National Assembly.

According to him, work in the direction of program-targeted budget  construction in Armenia is continuing.  "This means that we will pay  special attention not to the quantitative side of expenses, but to  the qualitative one and to monitor the results to which the new costs  led. It is this logic that should continue the discussions," the  prime minister said.

Karen Karapetyan believes that the government's actions aimed at  developing the Armenian economy have already started and will be  consistently continued, which was reflected in the new - approved  government program for 2017-2022. Earlier, in an exclusive interview  with ArmInfo, the Minister of Finance of Armenia Vardan Aramyan  informed that the terms of transition to the system of program  budgeting in the republic from 2018 will be preserved. According to  the minister, effective use of budgetary funds is an important  problem, especially in the context of limited budget resources.  Program budgeting, he said, if properly implemented and applied, can  be the convenient tool that will allow under these conditions to  determine priorities in the allocation of budgetary resources and to  maximize the effectiveness of planned costs. The emphasis, he  believes, should be shifted from the need for the funds necessary for  the state to perform its functions, on what results the state will  receive from using the budget, that is, ultimately, to understand  what exactly managers are requesting financing and as a result, the  society will receive this money.

As it was informed earlier, starting from 2018 Armenia will  completely switch over to the system of program budgeting. August 13,  2015, the Armenian government approved the strategy for the  transition to program budgeting. Assistance in developing the  document was provided by the German Society for International  Cooperation (GIZ) and the United States Agency for International  Cooperation (USAID). The new system will be managed on the same  principles as for the development of medium-term expenditure  programs. The new model for the formation of the state budget  provides that the budget should be compiled on the basis of not only  quantitative but also qualitative cost estimates. Accordingly, branch  ministries will be able to adjust their future budget programs taking  into account previously achieved results. The logic of budgeting will  also change. State bodies will be responsible for the compilation and  results of their programs. Moreover, ministries' apparatuses will  have to acquire financial knowledge to evaluate the effectiveness of  their programs and evaluate the proposed new ones.