Comments on the Draft Directive from the Central Committee Forwarding the Financial and Trade Office’s Report on Fiscal and Credit Affairs (April 12, 1962) To the Premier [1]: This document [2] together with its attachments and supplementary tables [3] have all been reviewed.
They are considered very good and may be issued forthwith.
Mao Zedong April 12

The attachments and supplementary tables are to remain in my office for further review. Printed from the manuscript.

Notes [1] The Premier refers to Zhou Enlai.

[2] Refers to the Central Committee’s draft directive of April 12, 1962, transmitting the State Council’s Financial and Trade Office’s report dated March 25 concerning the implementation of fiscal and credit policies in 1961 and how to realize the Central Committee’s policy of “balancing the budget for the current year with a slight withdrawal of funds” in 1962.
The directive states that the Central Committee approves this report by the Financial and Trade Office and endorses the measures proposed therein for balancing revenues and expenditures and eliminating the deficit.
Immediate arrangements should be made accordingly, and these directives must be rigorously carried out.
The Central Committee believes that the current financial and economic difficulties are somewhat greater than had been estimated at the enlarged Central Working Conference held in February 1962—difficulties that were not fully appreciated at that time.
The entire Party must resolve to adopt every feasible measure, including increasing production, practicing strict economy, curtailing enterprise, institutional, administrative, and defense expenditures, and raising prices on certain high-cost commodities, so as to completely eliminate the deficit and truly achieve a balanced budget.
In accordance with the national budget and credit plan for 1962 as now approved, the funds available to us this year are limited to the amounts specified.
All localities and departments must promptly implement the centrally approved national budget and credit plan down to each spending unit, establishing a system of responsibility at every level and layered control, allowing only reductions and no increases.
The report provides a preliminary examination of fiscal revenues and expenditures over the past four years, revealing the true situation: inflated revenue figures and persistent annual deficits.
This is highly beneficial for understanding the difficulties, drawing lessons, and improving our work.
The report proposes an order of priority for the allocation of funds, first providing working capital and credit needed for production and circulation, and then allocating funds for basic construction.
This principle is correct.

[3] The attachment is the State Council’s Financial and Trade Office’s report dated March 25, 1962, addressed to Mao Zedong and the Central Committee, concerning the implementation of fiscal and credit policies in 1961 and how to realize the Central Committee’s policy of “balancing the budget for the current year with a slight withdrawal of funds” in 1962.
The report consists of three main parts: first, a review of the implementation of the 1961 national budget and credit plan, along with a brief overview of fiscal conditions over the preceding four years; second, the formulation of fiscal and credit targets for 1962; and third, several recommendations for implementing the 1962 national budget and credit plan.
There are three supplementary tables: one is a draft table of adjusted revenue and expenditure targets for the 1962 national budget; another is a draft table of credit revenue and expenditure for 1962; and the third is a draft table of cash disbursement plans for 1962.