The Cabinet on Tuesday approved a revised 112.57 trillion yen ($774 billion) draft budget for the next fiscal year starting in April, allocating an additional 500 billion yen in emergency funds to tackle the fallout from a New Year's Day earthquake that ravaged central Japan.

Prime Minister Fumio Kishida has ordered a rare revision of an already finalized budget plan, valued at 112.07 trillion yen, to ensure sufficient funds are allocated for the relief and reconstruction of the affected areas.

The budget will be the second largest after the record 114.38 trillion yen for the current fiscal year. The plan needs parliamentary approval before the start of fiscal 2024.

Finance Minister Shunichi Suzuki said the doubling of reserve funds to 1 trillion yen in total is necessary, noting that the extent of the quake's damage has yet to be fully grasped.

Photo taken on Jan. 16, 2024, shows a broken electric pole in Wajima in central Japan's Ishikawa Prefecture, following a strong earthquake on Jan. 1. (Kyodo) ==Kyodo

"One trillion yen is such a huge amount," Suzuki said at a press conference. "The use of reserve funds is appropriate because it will enable us to respond to the disaster in a seamless, speedy and flexible manner."

Japan's fiscal health is the worst among developed economies, with roughly a third of the spending financed by debt, or 31.5 percent. It rose slightly from the earlier estimated 31.2 percent.

Debt issuance was revised to 35.45 trillion yen from 34.95 trillion yen under the initial general-account budget plan endorsed last month.

The magnitude-7.6 quake struck the Noto Peninsula on the Sea of Japan coast on Jan. 1. More than 220 people have been confirmed dead, while tens of thousands of people remain in shelters.

Kishida has instructed officials to compile an emergency package to assist local residents and businesses affected by the disaster.

The government usually allocates funds for emergency use in a state budget without specifying how they will be spent.

There has been criticism about the government's increasing reliance on such funds that are not subject to parliamentary scrutiny.

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