China will see its deficits drop to 1.5 percent of the national gross domestic product (GDP) this year, down 0.15 percent from last year, the Ministry of Finance said on Monday.

The budgeted deficit of the central government this year was 295 billion yuan (US$37 billion), 5 billion yuan less than that of last year.

As the country registered robust economic growth of 10.7 percent in the first three quarters, the Chinese central government will continue to adopt a prudent fiscal policy to restrain government expenditure, control deficits and increase revenue, said the ministry's spokesman Zhang Tong.

The government now stresses a more reasonable economic structure and coordinated development in rural and urban areas, said Zhang.

China has set aside 14.2 billion yuan in subsidies to arable farmers this year, with 14.18 billion yuan already allocated by October 20, according to official data.

By the same day, 11.98 billion of a 12 billion-yuan allowance had been given to 730 million farmers to combat fuel and fertilizer price hikes.

Another 78 billion yuan was used to offset the revenue losses of local governments after the central government abolished agricultural taxes at the end of last year.

Apart from supporting the development of rural areas, the Ministry estimated a total of 160 billion yuan would be provided for local governments in the mid-west and areas with large proportions of ethnic minorities to improve public services.

Another 23.5 billion yuan was used to subsidize county and township governments in an effort to improve their financial capability.