The Cabinet approved a draft Monday for a fiscal investment and loan program for fiscal 2000 worth 42.9 trillion yen, down 18.7 percent from the current year. The decrease in the scale of the so-called zaito program is the biggest ever. The drop is in preparation for the government's plan to overhaul the program starting in fiscal 2001, Finance Ministry officials said. The planned reform is in response to criticism that use of zaito funds has been inefficient. The zaito program has two facets: general outlays and investment funds for financial markets. The general outlays go to government-affiliated firms and local governments, which then use the money to offer loans and make investments. The investment funds portion manages postal deposits, pension money and public insurance funds on financial markets. According to the draft, general outlays will decrease 4.8 percent from the current fiscal year to 37.45 trillion yen, and funds to be managed in financial markets will be 5.54 trillion yen, down 59.1 percent from the current fiscal year. The overall zaito budget, often called the second budget due to its size, is compiled separately from the government's primary budget, which draws mainly on tax revenues. Zaito funds come from nontax income, including postal savings, and must eventually be returned. Finance Ministry officials said they have reviewed areas targeted for loans and investments for the fiscal 2000 zaito budget, ahead of the expected submission to the next ordinary Diet session of a bill aimed at overhauling the program. The overhaul would call on governmental lenders under the zaito program to raise funds directly from financial markets instead of relying on funds from state-run postal savings and a pool of national pension funds, as they currently do. But the officials stressed that they remain committed to projects that they feel are essential to support the nation's nascent economic recovery. Specifically, 10.38 trillion yen will be allocated for the Housing Loan Corp. to promote housing investment. The figure marks a 2.7 percent rise from the current year. Funds for measures to assist small and midsize firms, as well as venture companies, will meanwhile remain almost unchanged from the previous year's level at 6.44 trillion yen. Meanwhile, the draft also says disbursement of funds to the Japan Bank for International Cooperation, which was created on Oct. 1 through the merger of the Export-Import Bank of Japan and Overseas Economic Cooperation Fund, will be reduced by 30.8 percent from the current year to 1.83 trillion yen. The Development Bank of Japan, which is also a merger product of two public-sector financial organizations -- Japan Development Bank and Hokkaido-Tohoku Development Finance Public Corp. -- will receive 1.99 trillion yen, down 31.4 percent, according to the ministry plan. Ministry officials explained that allocations for JBIC and DBJ dropped due to a rebound from last year's surge. Last year, the government significantly increased its outlays for these financial institutions to help crisis-hit countries in Asia and ease the credit crunch. The ministry also counted only 2 trillion yen -- down 76.5 percent from last year's 8.5 trillion yen -- as state-run postal saving funds to be managed in financial markets.