Drafting of Defense Budget Begins; Stock Prices Tumble Five to Six Points

A special committee of Cabinet ministers, chaired personally by Premier Golda Meir, has been charged with the delicate task of drafting a budget for the Defense Ministry that will fit into the fiscal limits outlined by Finance Minister Pinhas Sapir. The next fiscal year commences on April 1, 1972 and it is customary to present the draft budget to the Knesset on the first Monday in January. A matter of sharp public debate recently has been over whether the Defense Ministry’s budget should be trimmed along with those of other ministries.

Sapir has suggested an overall budget proposal for fiscal 1972 reportedly in the amount of $4 billion including a $750 million deficit. Draft budgets already submitted by all ministries amount to about $5.6 billion and major cuts will be required to bring it into line with the Finance Minister’s best estimate of what the economy can bear. Stock prices tumbled Friday on the Tel Aviv Stock Exchange after the Finance Ministry announced plans to freeze dividends in the coming year. While there was no mass selling by investors, most of the shares traded dropped five to six points.

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