DISCUSSES 1951 BULGARIAN BUDGET, COMPARES IT WITH 1949 AND 1950

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600390299-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: October 19, 2011
• Sequence Number: 299
• Publication Date: May 11, 1951
• Content Type: REPORT

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CLASSIFICATION CONFIDENTIAL COMF MIAL.
CENTRAL INTELLIGENCE AGENCY REPORT
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS CD NO.
COUNTRY Bulgaria
SUBJECT Economic - Fiscal, budget
HOW
PUBLISHED Daily newspaper
WHERE
PUBLISHED Sofia
DATE
PUBLISHED 27, 29 Dec 1950
LANGUAGE
THIS DOCUMENT CONTAINS INFORMATION AFFECTING THE NATIONAL DEFENSE
OF THE UNITED STATES WITHIN THE MEANING OS ESPIONAGE ACT $O
U. S. C.. $I AND SE, AS AMENDED. ITS TRANSMISSION OR THE REVELATION
OF ITS CONTENTS IN ANT MANNER TO AN UNAUTHORIZED PERSON IS PRO'
HIBITED BT LAW. REPRODUCTION OF THIS FORM IS PROHIBITED.
DATE OF
INFORMATION 1950
DATE DIST. ,/ may 1951
NO. OF PAGES 6
SUPPLEMENT TO
REPORT NO.
DISCUSSES 1951 BULGARIAN BUDGET,
COMPARES IT WITii 1949 A YD 1950
DRAFT BUDGET FOR 1951 -- Sofia, Izgrev, 27 Dec 50
In his speech delivered on 26 December 1950, at the session of the Coun-
cil of Ministers called to discuss the budget for 1951, Kiril Lazarov, Min-
ister of Finance emphasized the following pointsi
The budget of 1950 presupposed the fulfillment and overfulfillment of
the yearly economic plan and the advance fulfillment of the Five-Year Plan.
These objectives have been successfully reached. Industrial production, in-
cluding that of local industries, has exceeded 1949 by 23.3 percent. The
production of cotton fabrics has been three times as high as in 1939, that
of woolen fabrics twice that in 1949, and the production of electric power
exceeded the entire period between 1933 - 1937.
aAccording to preliminary data, revenues of the 1950 budget, excluding
those entered at the beginning of the year, amount to 218,7 billion leva,
and expenditures to 207.6 billion lava, thus showing a surplus of 11.1 bil-
lion lava, whereas the expected surplus was only 2.2 billion leva. This fa-
voreble balance was provided mainly by the turnover tax and the deductions
collected from the profits of industrial enterprises. The preliminary data
also indicate that 70 billion leva were used in 1950 for capital investments,
or 10 billion more than-in 1949, whereas the financing of industry exceeded
the 1949 figure by 49 percent, and that of agriculture was higher by 80 per-
cent.
The plan for the accumulation of the state's financial reserves has
likewise been fulfilled.
The 1949 budget as voted by the National Assembly, totaled 152.5 bil-
lion leva, without envisaging a revenue surplus. However, accounting re-
ports have disclosed that the revenues totaled 169.4 billion and expendi-
tures 151.4 billion lava, producing a surplus of 17.9 billion leva, of which
12.6 billion were accounted for by the national budget and 5.3 billion by
CLASSIFICATION CONFIDENTIAL
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-'" .-"people's'soviets, Under the 1949 budget, 59 percent of all expenditures
w allocated for social and educational measures, 10 billion for agricul-
ture, 8,6 billion for industry, 8 billion for public health, etc., whereas
capital investments totaled 60 billion leva.
The 1Q51 economic plan envisages a general increase in industrial pro-
duction of 22.1 percent, evaluated in 1939 fixed prices. Compared to 1950,
production in particular branches will be increased as follows: coal 24.8
pe^cent, ele(.tricity 36,6, cast iron 58,1, tractor plows 90, cotton fabrics
12.2, woolen fabrics 10.5, shoes 48.2, sugar 68.3, soap 53,1, cheese 33.3,
lard 57.2 percent, etc.
The over-all goods turnover in 1951 is slated to increese by 18 percent.
Agricultural production will increase by 44.5 percent.
The national budget for 1951 submitted to the National Assembly calls
for 271.7 billion leva in revenues and 267.9 billion leva in expenditures,
with a revenue surplus of 3.8 billion leva. It exceeds the budget of 1950,
including supplementary budgets, by 53.4 billion, or 25 percent. About 72,1
percent of all expenditures will go to finance the national economy, and for
social and educational improvements. The state budget will absorb 222 bil-
lion leva of revenues, whereas 31.4 billion will 'e allocated to the people's
soviets,
The revenues, as in past years, will be drawn mainly from the turnover
tax and the profits of cost-accounting enterprises, as well as from the rev-
enues of MTS. The above items will total 157.8 billion leva, or 58 percent
of all revenues. The profits from state enterprises of major importance are
scheduled to increase by 13.6 billion leva, 9 million of which are to be ob-
tained by cost reduction.
Austere economy and strict accounting should rule in every enterprise,
as these principles have frequently been overlooked in 1950, Thus, the Zem-
snab Enterprise In Vidin has wasted 45,000 kilograms of graded corn seed,
valued at 523,000 leva, The Balkanturist State Economic Enterprise has pur-
chased rubber runners for hocel corridors, worth 150,000 leva; a few months
later the runners proved unsuitable and were replaced by oriental-style car.-
pets costing 2.3 million leva. The same enterprise left a shipment of export
cigarettes valued at 641,500 leva to mold.
The revenues will. further include a government loan of 10 billion leva,
whereas the direct income tax should bring in 27.2 billion leva. Most of the
latter sum comes from the general income tax, which will be collected accord-
ing to the new tax law of 1950 and is expected to reach 20.8 billion leva.
The rev tax law provides for progressive taxation, and is designed for the
protection of the interests of the working classes against the capitalist
groups .n cities and rural areas, However, the income tax will constitute
only 10 percent of all budget revenues, whereas it amounted to 10,8 percent
in 1950.
The tax reforms of 1950 also eliminated 14 local taxes and assessments.
Beginning 1 January 1951, the taxes formerly levied on heads of families, on
every kilogram of unpolished rice, and tobacco produced using nonmotorized
vehicles, etc., are canceled. This will save the population 3 billion leva.
About 218.2 billion leva of expenditures will be allocated to the state
budget and 47 billion to the budgets of people's soviets. Only 20.6 billion
leva will be allocated to the Ministry of Defense, or less than 7.7 percent
of all revenues. The small increase in this allocation is expected to im-
prove the Army's food and clothing supply.
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As in the past, a large share of expenditures will be used for capital
investments. These will total 78.3 billion leva, 57 billion of which will be
provided from the budget. An additional 14 billion leva will be allocated for
capital investments of farm workers' cooperatives and public organizations.
The 1951 investment plan envisages the completion of several large projects,
such as the Stalin Fertilizer Plant, the Republika and Maritsa 3 Thermal Power
Plantr, the Georgi Kirkov Boiler Plant, the Chervena Zvezda Machine-Building
Plant, the Brushlyan reclamation system, and others. The cost of all projects
scheduled to be ready for operation in 1951 totals 92 billion leva. Construc-
tion work will also be intently pursued on some other projects, including the
Stalin, Rositsa, and Georgi Dimitrov dams; metallurgical, cellulose, and soda
plants, the Clement Gottwald Spinning Mill, the expansion of the Vulkan Cement
Factory, etc. The machines and equipment of enterprises to be completed in
1951 come from the USSR.
Agriculture will also benefit extensively from capital investments, espe-
cially in the Dobrudzha area, where irrigation, reclamation, afforesfutivu,
electrification, etc., will. be provided.
Despite the stage of progress reached on many projects, construction in
general is still suffering from many shortcomings, such as the high cost of
building, which is caused, in part, by the unsatisfactory work of drafting or-
ganizations. Despite warnings and government decrees, these organizations are
still admitting in their drafts and plans many suferfluities and luxuries,
greater expansion of production areas than is warranted by technological con-
ditions, and uunduly large size of buildings. Another reason for the high cost
of construction is the poor organization of building and installation work, en-
tailing the .Insufficient utilization of mechanical equipment, the misappropria-
tion of materials, the undue delay of manpower, etc. The high cost of admini-
stration has not been restricted. In 1951, the government plans to reduce the
cost of building and installation work by 20 percent and thereby save 8 billion
leva.
The reform and mechanization of agriculture will play an important part
in the new budget.. The subsidies will grow from 18.7 billion leva, in 1950 to
23.5 billion in 1951, of which 10 billion will be allocated for capital invest-
ments, and 4 billion leva will be channeled through the Bulgarian Investment
Bank for construction work on farm workers' cooperatives. The MTS received
3.6 billior leva under the 1950 budget, and will be allocated 6.1 billion in
1951. This will allow for the establishment of 20 new MTS, bringing their
total number to 115.
The working funds of coat-accounting enterprises will be increased to
18 billion lever.
Work organization and technical procedures should be directed at cutting
down production time. The cost of raw and auxiliary materials must be lowered,
and :inished products should be disposed of promptly. Any unnecessary accumu-
lation of circulating funds must be prevented, as this practice is frequently
used to cover up unsound economic procedures.
Many enterprises are still unaware of these principles. The State Shoe
and Clothing Trade Enterprise in Ruse has kept in storage, for the last year,
a shipment of imported cloth crowns for caps, estimated at 11.5 million leva.
The Narmag stores in Gorna Oryakhovitsa, Pleven, and Ruse keep a stock of rub-
ber tires for bicycles, valued at u.5 million leva, which will take at least
2 years to sell. The tleriga State Industrial Enterprise is keeping in stock
45,900 kilograms of horseshoes, manufactured in 1949, which cannot be sold be-
cause of their small size. The Georgi Dimitrov Locomotive and Railroad Car
Plant has in stock 36,465 kilograms of rivets, which, on the basis of average
requirements, will last for 73 years. The Rayko Damyanov Plant in Sofia has a
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supply of storage batteries on hand, worth 36 million leva, owing to its poor
salesmanship. The Stalin Plant in Dimitrovo keeps a stock of electrolytic ma-
terial worth 25 million leva, which could supply its production requirements
for the next 4 years, and the Kliment Voroshilov Plant in Sofia has set up a
store of tool steel sufficient for at least 10 years. These examples could be
multiplied.
Budget expenditures for social and cultural measures will total 68.9 bil-
lion leva, and will exceed the corresponding amount in 1950 by 13.4 billion.
-Aucational institutions will receive 16.4 billion leva. Trade schools, which
will receive the greatest attention, will train large numbers of intermediate
personnel for various economic enterprises. The number of trade schools will
be increased from 152 in 1950 to 161 in 1951, and the number of students will
increase by 17,179. To provide the necessary teaching staffs, the number of
the
and
teachers' seminaries will be increased from 19 in 1950 to 29 in 1951,
d w+~e00e from Q.2'1 to 11.320. The
number of students in tine 2emU1LR1ice ni-- - ----- ---- -' -
total number of students in both general and trade schools will increase by
138,160, in 1951, and the number of teachers will rise from 46,806, in 1950
to 48,932 in 1951. The number of nurseries will be increased from 4,604 in
1950 to 4,967 in 1951, and the number of cnildren attending will increase from
191,599 to 219,512.
Credits for public health will total 12 billion leva.. The public health
system will be reorganized. The number of health inatit?:tions will be increased
by 14,8 percent, and the number of beds by 14.7 percent. Maternity and chil-
umber of mPflir.Al. stU- -
d the
n
drens' hospitals will increase by 21.3 peree:a an, ..~ -^ {~ j----
dents by 65.7 percent. Physical culture will be allotted 900 m lion leva.
Eight of the ten hospitals and three of the four sanatoriums, now under con-
struction, will be ready for operation in 1951. In addition, 91 new health
centers will be opened, mostly in rural areas.
In the field of public education. 140 of the 168 projects now under con-
struction will be opened in 1951, 102 of them in rural areas.
Capital investments for communal projects will also be considerably in-
creased. Of the ten bathhouses now under construction, six will be ready for
operation in 1951, pipes will be provided for 154 water systems, and 150 water
systems will be completed for operation in the same year.
The people?e soviets will be provided with considerable funds for financ-
ing their educational and economic enterprises, such as high schools, trade
schools, hospitals, prev?ntoriums, sanatoriums, medical schools for auxiliary
medical personnel, etc. The people's soviets will be provided with ne=.z sources
of revenue for their own budgets, and their subsidies from the state budget
will total 15.6 billion lava.
Administration costs are to be reduced in 1951 by 2.1 percent.
because of the revenue surplus, totaling 3.8 billion leva, the value of
the 1ev will be strengthened and stabilized.
The operations of the Bulgarian National Bank and the Bulgarian Invest-
ment Bank will be reorganized. The main objective of the reform is to assure
efficient control of financial and production plans in various enterprises by
means of bank credits. New payment regulations will increase financial disci-
pline among the enterprises, and stricter controls will also be established
over the utilization of the wage fund. Construction credit regulations will
also be tightened.
c't e dDE~~T!AI
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Heretofore, the Bulgarian National Bank has frequently authorized loans
to state cooperative enterprises without checking their purpose or establish-
ing payment terms according to production, trade, and financial plans. There
also has been insufficient supervision of the utilization of accumulated and
circulating funds of enterprises. As a result, circulation funds have been
often used for investments or loans, to cover up for losses, etc. The Mesot-
sentrala State Trading Enterprise in Mikhaylovgrad has diverted 52 million
leva for investments, losses; loans, etc.', and, as a result, has been unable
to repay its bank debts. The Bulgarian Investment Bank should also amend sub-
stantially its operations, and launch a determined fight against superfluities,
waste, dissipation of funds, negligence in the use of materials, and insuffi-
cient utilization of machinery and manpower.
The Ministry of Finance should strengthen its supervision over the utili-
zation of funds and materials. In 1950, a reform based on the Soviet pattern,
resulted in the reorganization of the Ministry's control and auditing depart-
ments. However, these measures have proved to be insufficient. Financial con-
trol and discipline must be further improved in every ministry, department, en-
terprise, people's soviet, etc.
The draft of the 1951 budget reflects the peeve-loving attitude of the
Bulgarian Government, and will provide further support for the ideas expressed
in the world peace movement.
VCYPE 1951 BUDGET -- Sofia, Izgrev, 29 Dec 50
on 28 December 1950, the National Assembly voted unanimously to approve
the 1951 national budget, as follows (in leva):
Revenues 271,793,658,000
Expenditures 367,921,568,000
Surplus of revenues 3,872,000,000
The state budget is approved, as follows (in leva):
Revenues 222,066,007,000
Expenditures 218,194,007,000
Surplus of revenues 3,872,000,000
The local budgets are approved, as follows (in leva):
Revenues 31,390,651,000
Expenditures 47,002,512,000
Subsidies from the
state budget 15,002,512,000
The following deductions will be made from the local budgets for state
taxes:
For Turnover Tax the following deductions will be made:
1. Ruse Municipal People's Soviet and Dimitrovo Okoliya People's
Soviet - 1 percent.
2. Burgas Okoliya People's Soviet - 3 percent.
Gabrovo, Gorna Oryakhovitsa, Troyan Okoliya People's Soviets, and
Burgas, Pleven, and Sofia Municipal People's Soviets - 5 percent.
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4. All other okoliya and municipal people's soviets - 10 percent.
For General Income Tax the following deductions will be made:
1. Ruse Municipal People's Soviet, and Burgas and Dimitrovo Okoliya Peo-
ple's Soviets - 10 percent.
2. Gabrovo, Gorna Oryakhovitsa, Plovdiv, Ruse, Sofia, Stara Zagora, Tol-
bukhin, and Troyan Okoliya People's Soviets, and Burgas, Pleven, and
Sofia Municipal People's Soviets - 20 percent.
3. Balchik, General Toshevo, and Elkhovo Okoliya People's Soviets - 30
percent.
4. All other okoliya and municipal people's soviets - 60 percent.
.~/ tax, the tax for gratuitously acquired prop-
For the military Lrdefense?
erty, and taxes payable under Article 16, Paragraph II of the Bulgaric ? Budget
Law of 1950, in all okoliya and municipal people's soviets - 100 percent.
Ministers and department supervisors may not transfer allocations from
one paragraph to another. A shifting of allocations under the state budget
may be granted only with the permission of the Council of Ministers, and under
the okoliya people's soviets budget with the permission of the Minister of Fi-
nance. A change of allocations under all other people's soviets budgets-may be
granted by the proper superior authority on advice,pg appropriate fipa.Rc_iqj organs.
The lists of personnel expenditures for the various services of the state
budget should be approved by the Council of Ministers.
Article 16 of the 1950 Budget Law remains in force until its abrogation.
The budget provisions will be enforced by the Council of Ministers.
The people's soviets are exempted from paying fines ordered by previous
commun.;y authorities, as well as from the debts owed to the state by these
authorities.
The 1949 budget is settled, as follows (in leva):
State budget 135,497,476,694
People's soviets budgets 33,933,944,526
Total 169;43h,421, 20
Expenditures
State budget 117,401,462,316
People's soviets budgets 34,032,838
Revenue surplus 17,997,962,,2
Total 169,431,421,220
C O NFO E MIAL
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