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BEIJING, June 9 (Xinhua) -- China will set up a special transfer payment mechanism to ensure that fiscal funds can directly benefit businesses and people, according to a State Council executive meeting Tuesday.

Under the mechanism, the country will increase transfer payments from the central government to local governments, and arrange transfer payments from government-managed funds, said a decision adopted at the meeting chaired by Premier Li Keqiang.

The mechanism will be in place to ensure that funds go straight to prefecture and county governments in a timely manner, the decision said.

China has decided to cut taxes and fees by another 2.5 trillion yuan (about 354 billion U.S. dollars) for enterprises this year. As the move might put local governments under financial strain, the country will grant a total of 2 trillion yuan of fiscal funds to ensure the implementation of these supportive measures at the primary level.