Finance Minister Sadakazu Tanigaki submitted on Saturday a draft budget for fiscal 2004 worth 82.11 trillion yen -- but is reliant on bond issuance as Japan faces growing social welfare costs due to the rapidly aging population.

The draft budget is an increase of 0.4 percent from the initial fiscal 2003 budget and it is the second consecutive year the figure has risen.

To cover the expected revenue shortfall, the government will issue a record high amount of new government bonds, worth some 36.59 trillion yen on an initial budget basis. It will be the third consecutive year that issues of new bonds have increased.