Also Take Care of the People's Livelihood [1]
(November 13, 1956)
(1) In 1956, socialist transformation was basically completed, and the production of agriculture, heavy industry, and light industry all saw increases.


(2) The national construction undertakings of 1956 were marked by achievements. Most of the capital construction investments and other operational expenditures in 1956 were correct, while a portion was not. Of the 30.8 billion yuan (at old prices [2]) in budgeted expenditures, 2 billion to 3 billion yuan were used inappropriately or excessively, of which capital construction investment accounted for about 1.5 billion yuan or so.


(3) The people's livelihood improved and employment increased in 1956, and the people were happy. However, improvements in the people's livelihood must be gradual; one must not write checks too liberally. Excessive demands and matters temporarily beyond our capacity must be openly and repeatedly explained to the people.


(4) The 1957 budget estimates revenues and expenditures each at 30.865 billion yuan (of which self-raised funds amount to 215 million yuan. 30.865 billion yuan is equivalent to 31.765 billion yuan at the old prices). Among the budget expenditures, economic construction expenditures are 15.726 billion yuan, social, cultural, and educational expenditures are 3.93 billion yuan, national defense expenditures are 5.7 billion yuan, administrative expenditures are 2.5 billion yuan, debt service expenditures are 842 million yuan, foreign aid and other expenditures are 641 million yuan, state material reserve expenditures are 500 million yuan, credit funds are 500 million
[1]
This constitutes the main points of Mao Zedong's speech at a group leaders' meeting of the Second Plenary Session of the Eighth Central Committee of the CPC.
[2]
Refers to prices as of 1955.
yuan, and the general reserve fund is 526 million yuan. Among the economic, cultural/educational, national defense, and administrative expenditures, total capital construction investment is estimated at 12.673 billion yuan (equivalent to approximately 13.573 billion yuan at the old prices), of which self-raised funds account for 215 million yuan. The 1957 budget is balanced, but it is set rather tightly and should be coordinated with cash balancing.


(5) As money and materials are only so much, the 1957 annual plan must, in certain aspects, be appropriately scaled back compared to 1956, so as to ensure both the construction of key projects and the needs of the people's livelihood. The focus of the scaling back lies at the central level; local levels should also scale back as much as possible. Even so, generally speaking, our construction undertakings are still advancing, as both revenue and expenditure in 1957 are higher than this year's – revenue increasing by 2.25 billion yuan, i.e., a growth of 8.2%; expenditure increasing by 953 million yuan, i.e., a growth of 3.2%. Regarding the issue of scaling back, it must be done with reasonable arrangements, ensuring no problems arise. Where materials are insufficient, priority must be given to supporting necessary production, while also paying attention to maintaining balance.


(6) An movement to increase production and practice economy must be launched among the entire Party and the people nationwide. [I] Production increases must be carried out under conditions where raw materials are guaranteed and there is social demand, and must simultaneously ensure quality and reduce workplace accidents. Economy measures hold promise and must be pursued under conditions that do not lower quality or increase workplace accidents. In terms of enterprise, institutional, and administrative expenditures, extravagance and waste must be opposed, a style of hard work and plain living promoted, and strict economy practiced. In production and capital construction, raw materials must be conserved, costs and construction prices appropriately reduced, and strict economy practiced.
[1]
On February 15, 1957, the Central Committee of the CPC issued the "Directive on Launching the Movement to Increase Production and Practice Economy in 1957." The directive proposed: making appropriate adjustments to the scale of construction in 1957, conducting specific analysis and re-prioritizing those projects originally scheduled to start in 1957; including in the annual plan those projects likely and necessary to construct in this year and the next; also re-prioritizing projects already under construction from last year and including in the annual plan those still likely and necessary to continue this year. In industrial and agricultural production, and in the operation of transportation, post and telecommunications, and commerce, every possible method must be devised to broadly launch a movement to increase production and practice economy, overcoming all forms of waste. Substantially reduce administrative management expenses, strictly limit personnel increases, rationally adjust existing institutions and personnel, gradually reform certain unreasonable salary and welfare systems, and thoroughly eliminate extravagance and waste.