CZECHOSLOVAK NATIONAL BUDGET FOR 1953

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700120481-3
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 11
• Document Creation Date: December 22, 2016
• Document Release Date: September 14, 2011
• Sequence Number: 481
• Publication Date: August 7, 1953
• Content Type: REPORT

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CLASSIFICATION RESTRICTED
-." CENTRALENTELLIGENCE~gGENCY
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS
COUNTRY Cze^.hos?lovatia
SUBJECT Economic -Financial, budget
HOW
PUBLISHED Daily newspaper
WHERE
PUBLISHED Prague
PUBLISHED 22 - 24 Apr 1953
o,~,.,~~.~?e , ,~~.~~?N ,...~.~.,~ .. ....... . ....
REPORT
CD N0.
DATE OF
DATE DIST. 7 ~-[1953
N0. OF PAGES 11
SUPPLEMENT TO
REPORT N0.
THIS IS UNEVALUATED INFORMATION
C~ECH~I_+'t^1IOi:AL BUD,;ET FCR 1153
Comment: Tire following report is taken from an address de-
livered to the Czechoslovak hutioasl P;ssecably on 21 April 1953 by
Jaroslav Kabes, Minister of Finance, reco:rr.;endin~ that the assesably
approve the proposed budget for 19'3; and from comments by other
members of the I7ational As,embly.
It m;ty be pointed out that this report t;ivcs ouch more detailed
information and many more absolute Figures than were avtiLable on
the 1952 budget. As part of the discussion of file 1;+53 budget, t':c
Assemble was also given i'inal budget figure; o:' t:-~ 6;iuistries oi'
uchools. Health and Physical 3ducutior, end Soci'11 }:cl:'aro fo,
1951_7
ffi1BE;, PROPC~ES BJDGET 'I'0 THE II:;TIOiLiL :r;SSbBLY -- Pry ua, 3ude F'ravo, dd
.,pr >3
Juronlav iCabes, Minister o.' Fin-:nc,?, yesterday presented to r},F Czecitoslo-
vt~.l, i!ational dssembly, for approval, the l~-.,? bud_eL? fie stated that the figure,
presented pre based on the results oi' `.he ;tote ecot+cr;y in 1'a5~, a,. we 11 as on
the planned inpreases i'or 1953?rl~.n,ted total national income will be l~35
billion crowns which, compared ?.aitn 1;52, shows a:; increase o^ 32.5 Percent.
Planned expenditures for 1953, =c.orlin:- to his rroposal. toC.:1 h30.9 biLliou
crowns, showing au ircreasc ?l
over l ~, oi' :~ percent.. iir-ccss
expenditures will total h,3 bil.lin:, ~?t?o?,r:s, of i+'cuc;e over
0:' the tar e iucrcase oce:?
;5~
the aaount of 75,p billion cro~,;:; a ,
tore. is only an apnnreut incre P.arenr, in both incor,+~~ and
ace, si;:ce i!;is year Cor th_ first ti+ae the budget
includes social security ?eceipts and expenditures; also, :.11 fi;;ur~G used
.?eilect- the full wnount of oath income and ~~;penditure o: or :. of th budget-
ary organizations and not ju^,t the dif:Cerence bet?,reen income at e:q,anciiture,
as uas been the custom heretoforc? Ouly fire remaiu?der of the lncrease c~er
1952 of some 31.1 billion Browns, therefore,
economy, ra;resents actual ;;rowth o!' the
CLASSIFICgT~ON FII.;T:iIL'SD
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Knbes stated that the largest single component of income is the turnover
tax in the amount of 29z.3 billion crowns, which is o7.1 percent o!' the tctal
national income. The second important source of nationnl income is the ac-
tual profit of nationnl enterprises. Roughly two thirds of the profits of
all national enterprises will be turned over to tkte national treasury. The
remaining one third will be retained by the enterprises to be used for planned
investments ~uildings, machinery, and other asset_]; for an increase in op-
erating funds; for apportionments to management funds; and for other purposes.
By close supervision of the remittance of profits by each enterprise to
the national treasury, pressure is exerted by the management for the estab-
lishment of true cost nccountittg, for reduction of production costs in the
enterprises, and for increased efficiency. It cannot be said that all of the
productive ministries have expressed, through this method, their understanding
of the problems, tasks, and needs of the state. ;.ccumulation (akumulacc) is
good evidence, and perhaps the main one, of good management in ttte enterprise.
The results shown by the Czechoslovak state farms in 1952 were unsatis-
factory, and hence burdene3 the state budget with planned as well as unplanned
losses. The state farms in 1952 did not fulfill the production plan; failed
to observe fully the agrotechnical time schedules, planned per-hectare yields,
and planned productivity of animals; did not secure the planned amount of i'od-
der and feed stocks; and failed to operate with Lru1y economical efficiency.
They have been instructed to reduce their cost oi' production expenditures by
some 13 percent in 1953?
Some enterprises of the tdinistry of Metallurgy and Ore }di^.es have failed
to fulfill their plans because of an inordinate amount of idle time caused
by delays in deliveries oi' new productive means. Some enterprises of the idinis-
try of Fuel and Power have shown a high percentage of interrupted production
caused by lack of deliveries of production machinery. iCnbes continued as fol-
lows: "Rejects and defective materials are the scourge of our industry. It
will be imperative to insist that losses caused by such defective production
be charged to the plant or enterprise u'nlch caused them; and ir. the audit and
supervision of the enterprises it shall be noted Sf such Losses have been
charged back to the plants r3uilty o!' poor work."
The second reason for failure to fulfill planned accumulation is the lssek
of r-+preciation of financial raana~ement. The national plan :and the national
budget are dependent on the total of all ~.conomic activity. Renee it is es-
sential and unavoidable that we create supervisory or,;an; and finuncittl de-
partments in all the brunches of the state udministrat,ion and in the main ad-
ministrative bodies; it is imperative that the directors o!' all orpaoizations
depend more than they have in the pst, on their o'.+r. 'in:.ncial sad accounting
workers to act as duardiacs of financial discipline.
It is not possible to permit or condone disordarLy accounting, laxity in
meeting accounting deadlines, or delay in the preparation of statistical re-
ports.
According to orders issued to the Ministries ort 10 February 1)53, all
enterprises must make monthly reports of the fulfillment. of *.he nl;ut and simul-
taneously must make provisions for fire removal of all deficiencies as well
as for the reduction of excel. expenditures.
The taxes paid by the individual citizens will amount to 1i.3 percent, o!'
the total national income sad will total almost 3G billion crowns, wttlctt sum
includes the amounts formerly contributed by the employees to t.ite social se-
curity fund.
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Just as the workers pay nn income tax, so the farmers, too, must pay their
agricultural tax, and steps must be taken to prevent a recurrence of the old
lax method of tax collections, which resulted in many tax delinquencies. The
National Committees as well as the farmers must solve this problem.
Expenditures
According to Kabee, the state expenditure for 1953 as projected in the
budget totals 430.9 billion crowns, and is to be apportioned as follows:
Department
Billion Crowns
Percent of Total
National Economy
254.5
59.1
Culture and Social Welfare
111.1
25.8
Defense and National Security
41.8
9.7
Administration
18.8
4.3
National Debt
4.7
1.1
Total
430.9
loo.o
The largest single item listed above is the sum set aside for the national
economy and Its development; of this sum almost 60 billion crowns will be al-
located for investments. In addition, the enterprises will expend about 37
billion crowns of their own funds for this purpose.
In 1952, investments increased substantially over the year 1951, and in
1953 it is planned to continue this expansion. In order to accomplish this,
the government has instructed its ministries to reduce the amounts needed for
construction work by some 20 percent; not by slowing down construction work,
but by eliminating superfluities in the projects, and by deleting an3 sim-
plifying the finishing processes in the buildings as well as in the production
of construction materials used. To secure a speedy completion of such invest-
ment works, it is necessary to center activities on the most important objec-
tives: on the purchase sad procurement of those objects moat urgently needed by
industry, on the repair of those now in wee, and on completion of construction
work now in process.
There are several things hindering the investment program. One of them
is the inefficient or negligent use of all industrial plants. Another is the
incomplete preparation of plans for a projected building or plant. The Invest-
ment Bank will not, and cannot, authorize funds for the construction of ob-
,jectives where complete and detailed plans and budgets have not been prepared.
The operating funds of the individual enterprises for 1953 have been in-
creased over 1952 by more than 12 billion crowns, of which the national budget
provides some 4.6 billion crowns and the balance is provided by the enterprises
themselves.
This increase in operating funds of the enterprises is depec:dert on sev-
eral factors. Speedup of turnover is one of the major problems of industry.
Any such program presupposes reduction of work in process, reduction of deliv-
ery time, increased deliveries of raw materials, strict scheduling of raw ma-
terisls, and a stringent discipline as to the fulfillment of plans.
In the national budget, the speedup of sales means quicker turnover in
current funds and more speedy release of such funds for other uses.
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This increnae in the ratio of turnover is especially important as far
as the ministries oP Heavy Industry and of Internal Trade are concerned. These
two ministries have a great deal of investment funds lying idle in tYreir vast
inventories. In 1952, these stocks were not reduced; on the contrary, they
have been increased. This was caused partly by the failure to fulfill the
production plan, the investment plan, and the plan for retail sales.
Agricultural expansion is one of the main tasks in the socialist state,
hence the government has set aside 3.5 billion crowns for the improvement of
plant culture and animal husbandry. This amount does not include the sums
allocated to agricultural research. There are billions set aside by the state
for the expansion, maintenance, and repair of machinery in the MTS. The JZD
(Unified Agricultural C,.~peratives) also receive state assistance in the form
of credit and reduction in rates charged by other government agencies ~or
goods and service. Credit available to the JZD has been increased 50 per-
cent over 1952; hence it means also increased respcnsibillty for the proper
use of such funds. This Important role falls to the Czechoslovak State Bank
and the Investment Bank.
The strength of the JZD rests in their own inner organization and not
in subsidiary grants made by the state. For this reason, the government has
made strict rules regarding the credit to be extended to the individual JZD,
since only through well organized credit will it be able to maintain its af-
fairs in good order.
The general repairs plan for 1953 almost trebles the money allocated for
the same purpose in 1952? General repairs, if done properly ao3 in time, will
prevent heavy expenditure for replacements and will prevent unnecessary stop-
pages and delays.
The second largest item of
the state budget Ss the fund set
aside for
culture and social welfare. It
is apportioned
as follows:
Item
Billion
Crowns
Per Cnpita
in crowns
Education and Enlightenment
33.9
2,692
Social Security
52.4
4,159
Health and Preventive Medicine
24.8
1,961
Total
111.1
8,812
The fund for hospital and maternity beds is increased 6.5 percent over
1952, and for creches, 9.4 percent. The number of children cared for in kin-
dergartens is to be increased 10.4 percent; the number of pupils in national
and middle schools, 5.6 percent; and the number of students attending insti-
tutions of higher learning, 11.3 percent.
Because norms for expenditure in the culture, social welfare, and health
programs have not yet been established on a scientific basis, it is imperative
that all sums appropriated for these purposes be utilized to the very best
advantage; undoubtedly it is possible to obtain more value for the sums expended.
The government has set aside one billion crow^s for scientific research.
1952 will remain a banner year in Czechoslovak socialist history, inasmuch
as the Czechoslovak Academy of Sciences, tl~a Slovak Academy of Sciences, and
the Czechoslovak Academy of Agricultural Sciences came into be ins during tlas
year.
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Det'ensc and Ilntional Security
The allocations made for the purpose of defense and ;:atio::ul security
amount to 9.7 percent of the total -+ational budget. This is comparatively a
large sum, but it would be a serio~ error on our part not to face reality
and not to be prepared to defend the cause of peace, in case of aggression.
or attack.
Administrative Expense
The administrative organs of the 3overrm:ent require art e:cper,diture of
18.8 billion crowns. although ir. rscent years a determined effort has been
made to reduce the amount of money erpended for administrative purposes, all
the possibilities for savings in state administration, suet: as simplification
of work and better organization, have by no means been exhausted.
The establishment of wage funds in 1952 has done a great deal to sta-
b111ze work discipline, and has also led to the creation of pr_determined bases
for a better arrangement of the plan o; :cork fur 1953-
The broad indexes of the plan of work must necessarily be supplemented
by detailed plans to conform with the goals andjor tas}?s of each separate or-
ganization. For this reason, the government, in its approval of the state
economic development plan for 195;, ins?sted that the systemisation of all
the administrative offices should continue to be the major task.
This systemization should also set a new tas}; for t::e finatcial organs.
They must compile n register of all approved ad,ninistrntive workers, with de-
ta11s on their status and personal oualifications. They must also render re-
ports regarding :rages, including the monthly average wage and the status of
wage funds; and the amount of administrative as we 11 as operational overhead.
The budgets of the national Committees are now completely independent;
the committees may no longer dip into the atnte fuc:ds, re;~ardless of the
amount of their own income they may have at their disposal. On the contrary,
they must hold down their own expenses to conform with t}:e income they ob-
tain from their own sources and the planned allotments from, s*.ate taxes. This
fact in itself will be an inducement to them to sea tt:at the state income plan
is fulfilled.
This year, for the first time, udmir,inCrat.io:: of the ilnr.ionsl Co:mnltt:ces
till include local enterprises, both i?ulustrial ami cut:e:,u: al, t},eir ulioca-
tions and remittances, so that t:,eir econo::ac result.; will be reflected ir.
the status of the National Comrtittec;;.
The national budget acts the total exne:,ditur~::; of t:;c ~ at.lot:al Commit-
tees at 70.1 billion crowns; their o:n; incase is :.et u6 1.5.1 billion crowns
and the difference, 55 billies c:?owns, h:_:; bee:: r.llocat.ec? fmm t}?e state tax
revenue.
The Rational Cotamittees urc the basic or,;anisation in ..::eel:oalove:k so-
ciety. Their activity brings titer into direct ,ortaet. w;.th o,illiors of citi-
zens and with the problems of their daily Life. 'he 1nr,;::::C :lc:ount of t're
co:-.ctittees' expenditure^, 6.z n.:raent, is devot'._?d to cu'_tur.L and social wel-
fare expenses. The [Iutioual Commnittees are directly r~a,oaaibL: ^or the pro-
vision oi' such services as repair and muiut;enance shops. 'Pne remittuucea oY
ronmunal enterprises, which were fort:!erly sent t:o the I.linist:?y o: tar Inte-
rior, are uorr the main source of income for the iational Cost:;:ittees.
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The nntionnl 'budr;et is the synopsis of the tasks and goals set I'or the
current year of the Flve-Year PLan. The year 1952 has been successful in the
following sectors: industrial production exceeded that of 1951 'oy 18.3 per-
cent and hence almost doubled that of 1937; the socialization of small busi-
ness is almost 99 percent complete, whereas as late as 1948, 86 percent of
the retail (small) business was controlled by private enterprise. Concomi-
tant]3?with iigher industrial production and increased agricultural production,
consumption has increased. In 1952, the consumption of meat has risen 2 per-
cent over that of 1951, and 27.5 percent compared witr. 1936. In 1952, the
consumption of lard exceeded that of 1951 by 9 percent; bread, 10 percent;
baked goods, 23 percent; synthetic edible lots, 3 percent; frozen vegetabl~ys,
17 percent; and cigarettes, 10 percent.
The higher living standard has been nchieved not only by greater prodrtc-
tivity, but also by the exchange of optional products for those of other na-
tions, particularly those of Lhe people's democracies.
STATEt~ir^.ii'f Oh' T1~ 1953 BUDGET BY JOZEF VAhC, VICE-FitE3IDEi~' Oz' TIr=. P.ATIOivAL
ASSEhffiLY -- Prague, Rude Fravo, 22 Apr 53
The national budget for 1953, gust pr.rented to tiro Assembly, lists a
total expected income of 435,207,287,000 crowns, and expenditures of
436,910,210,000 crorms, leaving a surplus o_ $,2y7,071,000 croups. The expendi-
tures include 70 billion crowns for r.ew im?estments. This is ir. addition to
the billions already earmarked for tre replacement, mairtenanc=, and repair of
factory buildings, machinery and er.tip:aera.
The 1953 budget allocates 23 .;; billion. cro?.ruu for education, w;rich >_ 24
times the amount spent *_'or liar purpo.:e i:: 1937; 21x,5 billion crown:, for health
and social welfare, which is 27 times fire a:count sr:ent in ly3'J; and
53,975,000,000 crowns for unemployment, sick benefits and family allotments,
xhich is 13 times the amount spent in 1937?
The National Coc;raittees preparel tl:e carious segments of tti:: budget in
23 all-day sessions. `. great deal of attention was given r,o the development
of the basic industry and the development of natural resources. Czechoclo-
vaki.. has a Brest many unexploited deposits and undevelcped areas which must
be utilized.
The Idinistry of Fuel and Power was criticised by the iiatioral Committees
for slow mechanization of the mines. Even though tare USSR ha^, furnished mod-
ern machinery, the mining industry has not yet learned to make effective use
of it.
It is of the utmost importance that ;:'re 1?tinistry or' heavy Machine Bui1d-
Sng fulfill the plans set for it, since it rot only furnishes ;aschinery for
the use of Czechoslovak industry, out for the people's democracies an3 the
USSR as well. Every delayed shipment is a hindrance to the ;;rent work o:
building socialism.
lv,S17?D3LY DISCUSSEr', TIffi 1953 BUDCLf -- Pra,-ue, Rudc Pravo, ~~ :iur 5;
Deputies of the ational l~ssembly continued their cliscussior. o' Lire 1953
budget with I?Ime :1ne;:kn Rodinova-Snurna, vice-president, presidi,:;.
bhne B. htauh:rr_ova-Dostalovu co :pared the Czechosloval: oudgat r;ith the
budgets of the cnnitalistic countrie?-. :`.mong otiret' comp:erison~, sl;e stated
that the US allocates ~; percent of its er.t.ira oud;;et :or direct ~ailitary
purposes.
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0. Burda, deputy, spoke on the necessity of the budUatis provisions for
military defense and national security purposes.
E. A. 'Link, vice-president of the national Assembly, said t::at i.n 1)53
the industrial production in Slovakia will be more titan five times that of
1937. In 1952, heavy industry alone reached a level of more than six times
that of 1937?
The plan for 1953 culls for an increase in coal production by 34 percent,
electric power by 36 percent, and iron-ore mining by 23 percent, as compared
with 1952. Deputy 'Link also stated that at the end of 1)j2 almost half of
the agricultural land in Slovakia was farmed by the socialist sector and there
were some okreses, such as idartin, Turcianske Teplice, Samaria, and Calovo,
where agriculture had been socialized up to 98 percent.
In addressing the assembly, both A. Fiala, another vice-preside:;t of the
Assembly, and Dr D. ?olansky, deputy, praised present conditions iu C~.echoslo-
vakia.
Deputy Holickn in iris discussion brought up the need of securing a suf-
ficient supply of ores for t}:e nation. Boti: the industrial potential a:,d
greater agricultural production are depe:;de.^.t on the 3e?.elopmer.t of natural
resources. The chief hindrances i.. the i'ieLd cf 3?oiogical researc!, are fire
lack of technical equipment, o: irs trurter.ts, and of t.raine3 personnel. Dur-
ing 1952, planned research excavations were fu1:'i11ed ;in meters) 97 percent.
Of this amount, EIEt percent consisted of borings. The situation remsins crit-
ical so far as trained personnel is concerned. During 1952, several geolo-
gists came from the univ?rslties. On the uholc, these wer? young; men, grad-
uates of the School of Mines, ?.+ho were not weighed down ?.:it'.t obsolete prej-
udices. Unfortunately they lacked experience, and the :;;eoLogical services
of cne mining enterprises need experienced peon lc.
Actually decrees regarding improvement in ;colu;ical research not only
are not being fulfilled, but, in some instances neither the enterprises them-
selves nor the mines are familiar with their provisions. The budgetary group
of the Ministry of t?tetallurgical Industry and Or^_ Nines i:as set, as13e sums
at Least three times as great as in 19;2 for the des?iopmer.t o^ research,
especially geological research of the ruaior,'s nutur.rl resources.
Deputy Jan Teper spoke on t}:e great develou..c:;t, :l;:.i c>:~:nsion of the min-
ing industry. In 1952, the production o; earl ;u:3 bro?.:n coal itad incro< ,ed
5,223,1+50 tons over the 1951 production. Tep?=r stated, ho?.ever, that the
Czechoslovak mining industry has not fully a3opted the So?:let cycle Mork sci:ed-
ule. It was planned that in February o^ this year 1tiG cy?les ?.tould be com-
pleted, whereas only 111 were actually completed. the Y::rech pLun called for
197, but only l0y were completed. '
Deputy M. Smok, a, engineer, :poke on t!:e ?xtreirc iml:ortance of electri-
fication for the socialist progra.,. This year, pc?. er production ui11 be 3~
times the a^rount produced in 1j37. In the period since 1950, Czechoslovak
power production iras increased more titan 50 percent.
Deputy B. iiozelka stated that at file end of 1)>> the production of pig
iron was 37 percent greater than 1:: 1937. T}:e production o:' steel was u2 per-
cent over that, of 137, ar.d rolle3 cons u;:?r ;nods exceeded by a