China budgeted spending of 13.82 trillion yuan (1.45 trillion pounds) in 2013 and a deficit of about 2 percent of GDP, the finance ministry said on Tuesday in its work plan unveiled at the annual meeting of parliament, the National People's Congress.
The ministry said it was raising the quota for bonds issued by local governments to 350 billion yuan in 2013, compared with 250 billion yuan in 2012.
It also pledged to further strengthen regulation of local government debt and curb irregular financing activities.
The budgeted deficit for 2013 compares with the 1.6 percent of gross domestic product deficit recorded in 2012, which was slightly above the budgeted 1.5 percent of GDP.
"China will appropriately increase the scale of the fiscal deficit and government bond issuance to guarantee spending plans," the document said.
The finance ministry said it would also expand its pilot programme to replace business tax with a value added tax.
(Reporting by Aileen Wang and Kevin Yao; Editing by Nick Edwards and Jason Subler)