What is public investment capital?? Also, through the following article, HVA will better understand this special source of capital and a special investment channel in the financial market.
What is public investment capital?
Public investment capital is known as the capital mobilized by the government and brought to public projects or works. Mainly, works and projects are built to serve the development of society, economy, and community infrastructure. Thereby promoting the national economy, improving life and raising the value of the country to a new level.
Public investment capital is mainly issued by the state to mobilize money from investors. Through that, sustainable social development is achieved without mobilizing too much capital from the state. This helps to minimize the possibility of increasing domestic inflation when circulating money sources stably and harmoniously.
Characteristics of public investment capital
The characteristics of public investment capital that HVA wants to bring to investors include:
General characteristics
To better understand public investment capital, investors need to review some of the following characteristics:
- Origin: Since ancient times, it has been recognized that public investment capital is formed from the state budget. It is known that many revenue and expenditure items are included in the state budget. Especially loans and capital funds mobilized from international or domestic financial organizations.
- Purpose: The loan fund is mainly used for public sectors, mainly infrastructure, industry, energy and public investment projects. Public investment capital is often used for pre-determined plans with long-term and special terms.
- Characteristics: Public investment capital is a long-term source of capital to help implement large-scale plans. Combined with that is a large amount of funding to help implement plans and projects quickly and smoothly.
Public investment capital is guaranteed by the state, so the safety of the capital source is high and is especially suitable for many domestic investors. What is public investment capital? Investors combine profitable investment with joining hands to build the country. This is considered the most worthwhile investment capital source at the present time. Regulations on transfer of public investment capital extremely strict and need specific planning to withdraw capital.
What types of public investment capital are there?
Currently, public investment capital is roughly classified into three main types including:
- Investment capital from the state budget: Public projects are mainly funded by the state budget. Usually, the funds are used for projects that have been planned in advance. Thanks to that, the capital from the state budget is utilized to the maximum and effectively.
- State loans: Known as loans from international organizations or domestic loans. From there, take advantage of loans to serve the construction of large projects or to supplement projects that are being implemented but lack budget.
- Development aid: It is understood as aid loans from other countries or non-governmental organizations that support each other between countries. From there, develop and build projects serving infrastructure, health, and education.
With the diversity of capital sources, the investment capital budget is used more effectively and for the right purpose. Thanks to that, the fund is not limited and there are many ways to use it when an emergency occurs.
From there, we can see the effectiveness in the way capital is spent. We consider this a potential investment channel for investors. Help investors Diversify your portfolio in the present and thrive in the future.
Public investment capital disbursement process
According to the investment capital disbursement process, it is understood in the following order:
Planning
First, the investment capital disbursement process requires the development of fixed investment plans. Cadres from each department in the localities prepare plans from short-term to long-term. From there, based on the amount of project budget established, localities need to submit the project to the government or competent authorities.
Project approval
After the project is completed and submitted to the government for approval, the project enters the project approval phase. With each different criterion, the project is submitted and waits for approval based on the government's current budget. Therefore, the more the project is suitable for the government's criteria for building infrastructure and society, the faster it will be approved.
Each department that helps approve a project needs to be carefully assessed for its expertise and feasibility. Thanks to that, public investment capital is used accurately and effectively. Avoid wasting national resources.
Implement funding and supervision
After many rounds of testing and evaluating the project's effectiveness, the project was approved and funded. Thanks to that, the project was carried out as planned. However, the funding will not be given to the locality in one batch but will be divided into small amounts. Depending on each stage, the funding source is different to serve the construction plan safely and effectively.
During the project implementation phase, the intervention of the monitoring unit is required. Thanks to that, the project progress is ensured and the funding source is used for the right purpose. From there, the public investment funding is guaranteed to be provided to the right project and avoid the project not being implemented properly.
Reporting and Evaluation
During the project implementation and execution through each stage, local units and other units need to report in parallel. Thanks to that, the project implementation is always covered and the government is aware of the situation. From there, the most objective assessment of the project progress compared to the plan is made.
Through reporting and checking the results of the plan implementation, it helps to accurately evaluate the investment results. Thanks to that, the allocation of capital and local technical infrastructure is more accurate. Through that, the government also processes the project's revenue and expenditure quickly and accurately.
Through the process of disbursing investment capital for public projects, it can be seen that in order to receive funding, projects need to be properly planned. This shows the importance of project planning and investment plans in disbursing public investment capital.
Notes on disbursement of public investment capital
Here are some notes along with Principles of public investment capital allocation need to grasp to bring the best solutions for localities including:
- It is necessary to understand the financial and banking policies of the fund. During the disbursement process, it is necessary to comply with the regulations on finance, auditing, budget, and bidding. Thanks to that, they are applied accurately and effectively.
- Closely supervise construction units and project implementation units. Especially in revenue and expenditure areas and need to disburse capital for the right purpose.
- Understanding the investment capital disbursement process and one thing helps ensure the project is approved quickly and effectively. Thereby reducing the risk of revenue and expenditure and improving the level of public projects in the future.
Seeing that the planning and smart investment of a project or work that depends on public investment capital is extremely tight and strict. Thanks to that, we can see that the purpose of using public capital is very safe and ensures profit. Therefore, investors when investing in public capital are not afraid of losing or not getting the interest back as expected.
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Conclude
What is public investment capital?? Through the above article of HVA helps investors see that this is a special source of capital. Guaranteed by the state and operated according to a process with countless strict regulations. Therefore, when investing capital here, investors do not worry about losses and will receive profits on time.
