The annual state budgets are more comprehensive than budgets in Western countries because they also cover economic activities that are the province of private enterprise in the West. Information on the manner in which budgets are formulated is not available, except that they are closely related to the annual economic plans and are prepared under the direction of the Ministry of Finance. Budgets must be approved by the Council of Ministers, the PCR, and the Grand National Assembly. The consolidated budget is divided into a central and a local budget; the local budget is roughly one-fifth the size of the central budget. Official statistics on the budget are deficient in that only summary data are published on the major elements of revenue and expenditures and the source of one-third or more of the revenue is not disclosed. The published data show a small budgetary surplus each year, regardless of the vicissitudes of the economy and unforeseen emergency outlays. Information is not available on budgetary performance in 1970, when the country suffered a disastrous flood. In the planned budgets for 1971 and 1972 revenues and expenditures were perfectly balanced. Budgetary revenues increased steadily from about 58 billion lei in 1960 to 147 billion lei in 1969, and expenditures rose correspondingly from about 55 billion lei to 143 billion lei. The budgets for 1971 and 1972 were planned to balance at a little more than 138 billion lei and 152 billion lei, respectively. Reasons for the decline in the size of the 1971 budget, the only decline reported in at least a decade, are not known. A turnover tax levied on consumer goods, farm products, and farm supplies and a profit on the income of economic enterprises and organizations constitute the main sources of budgetary revenue. The relative importance of the two levies changed after 1966; the yield from the profit tax approached that from the turnover tax in 1967 and grew relatively larger in 1968 and 1969. Together, these two levies accounted for from 50 to 56 percent of the annual revenues. Direct taxes on the population yielded close to 6 percent from 1960 to 1969, except that in the first and last years of that period their proportion approached 7 percent. The magnitude of direct taxes does not reflect the real tax burden borne by the population, because the population ultimately pays both the turnover and the profit tax through higher prices of consumer goods. Financing the national economy absorbed an average of 64.6 percent of annual expenditure in the first half of the 1960s and 68.3 percent in the second half of the decade. At the same time the proportion of outlays for social and cultural purposes declined from an average of 24.9 percent to 23.2 percent, although the absolute amount of these outlays more than doubled. Expenditures for defense declined from 6.1 percent of total outlays in 1960 to 4.4 percent in 1969. BANKING