A total of 550 billion yen will be set aside in the fiscal 1998 state budget for three special spending brackets to better concentrate public works outlays in key sectors, a top Finance Ministry official said July 4.

The new special brackets are designed to ensure that certain projects receive adequate funding at a time when the general budget for public works is to be trimmed. The three brackets are designed to allocate public works spending to infrastructure projects related to raising living standards, those to make distribution more effective and items that are not specifically public works-related, such as those concerning scientific technology and the environment.

On July 8, Prime Minister Ryutaro Hashimoto plans to outline new rules for budgetary requests for fiscal 1998 to replace the customary "request ceilings," which put uniform caps on budget demands by individual ministries and agencies. The new rules are to reflect last month's Cabinet endorsement of a package of numerical spending cut targets aimed to set the country on the path of fiscal reconsolidation.

The package includes such belt-tightening targets as reducing public works spending and official development assistance by at least 7 percent and 10 percent, respectively, from initial fiscal 1997 levels. These drastic efforts are needed if the government is to meet its self-imposed target of reducing its fiscal deficit to less than 3 percent of gross domestic product by fiscal 2003, according to government officials.