Reasons And Countermeasures To The Indebtedness Of County And Town Governments In Underdeveloped Districts

With the promotion of the financial fraction reform, the debt of government at the basic level, whose ownership of responsibilities and property is distributed unstandardly and restraining of debt is weakened, is the obvious growth situation. A lot of governments at the basic level of our country are in debt, especially the township governments in the county, is some kind of special phenomena during social economy transformation period of our country and the important components of the Three Rural' Issues too. Some effective measures must be taken to contain the severe reality of township government finance debts in large area. Otherwise, it will merely influence not only on the deepening of the rural economic system reform of our country ,the sustainable development of rural economy seriously, the normal running of the grass-roots political authority and stability of society, but also on the whole national economy to develop persistently, healthily and fleetly. In a word, the debt of township government in the county is not only an economic question, but also a great political issue and social concerning the overall situation, development and steady. The indebtedness of the county and town governments is a pervasive economic phenomenon, behind which there are complex and profound system reasons. This phenomenon is an important epitome of the Three Agricultural Problems in Modern Chinese (issues concerning agriculture, countryside and farmers), and its settling depends on the understanding and resolving to the Three Agricultural Problems. This paper, with the financial and personnel relation between central government and local government as the basis, analyzes the status in quo and scales of the indebtedness of county and town governments in underdeveloped districts, pointing out the foundation reasons, social reasons, system reasons and political reasons which cause the indebtedness. Based on the Public Finance Theory, the paper discusses the countermeasures to the indebtedness of county and town governments in underdeveloped districts, with the goals to reform the country market, to perfect the tax reform and to improve the financial system of counties and towns, aiming to transform the functions of the county and town governments and to reduce the government ranks.