Ministry of Finance. (Mainichi)

       TOKYO (Kyodo) -- Japan's Cabinet approved Wednesday budget compilation guidelines for fiscal 2022, setting aside around 4.4 trillion yen ($40 billion) to promote key policies such as decarbonization under Prime Minister Yoshihide Suga's green growth strategy.

       The total amount of the budget requests is expected to surpass 100 trillion yen for the eighth consecutive year following the 106.61 trillion yen initial budget for fiscal 2021, with no spending cap on requests again to respond to the pandemic, government sources said.

       "We will give priority to areas that could be new driving forces of the economic growth when compiling the budget," Finance Minister Taro Aso told reporters.

       A record-high initial budget formulated for fiscal 2021 for the ninth straight year means Japan, the nation with the worst fiscal health among major developed countries, is further delaying its goal to restore its financial position.

       The government aims to limit a rise in social security spending, about a third of the whole budget, to 660 billion yen amid the nation's rapidly graying population. But it looks to provide firm fiscal support to ensure the world's third-largest economy will keep recovering from the coronavirus-induced recession.

       The green growth strategy is one of four priority areas to focus on outlined by the Finance Ministry in the guidelines for the initial budget for the year starting next April. The other three are promoting digitalization, revitalizing regional economies and supporting child-rearing households.

       Under the green growth plan, the government aims to boost investment in technologies to tackle climate change such as renewable energy, hydrogen fuel and carbon recycling. It also looks to set up digital infrastructure to offer more administrative services online and providing more opportunities for workers and students to acquire IT expertise.

       Ministries and agencies will make budget requests by the end of August based on the guidelines, for scrutiny by the Finance Ministry before compilation of the fiscal 2022 budget later this year.

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