The Diet gave the green light Monday evening to a 7.86 trillion yen stopgap budget for the first 18 days of fiscal 1998, which begins Wednesday.

The budget cleared both houses of the legislature following deliberations. The stopgap measure became necessary because of a delay in Diet deliberations on the main budget for fiscal 1998.

It would cover necessary government outlays until the fiscal 1998 budget, which is still being debated by the Upper House, takes effect. By law, any budget approved by the Lower House takes effect automatically after 30 days regardless of whether the upper chamber has voted on it.

The fiscal 1998 stopgap budget is the first to be created in two years. It includes 1.14 trillion yen in social-welfare-related spending, 1.47 trillion yen in public-works-related expenditures and 4.02 trillion yen in grants to local governments, according to the Finance Ministry.

A 4.24 trillion yen provisional fiscal investment and loan program is also intended to cover the first 18 days of the new fiscal year.

In the meantime, government and Liberal Democratic Party leaders have decided to extend 2 trillion yen in income tax cuts for this year into 1999 in hopes of reviving the economy, government and party sources said.

Prime Minister Ryutaro Hashimoto will announce the measure as part of a 16 trillion yen economic stimulus package before he leaves in mid-May for the annual summit of eight major powers, they said.

The government and the LDP are expected to make a formal decision at a meeting of the Conference of Fiscal Structural Reform after the Diet enacts the 77.67 trillion yen state budget for fiscal 1998, which starts Wednesday. The budget is being deliberated by the House of Councilors following endorsement by the House of Representatives and is expected to clear the Upper House around April 10.