(Corrects in 2nd paragraph to nine years instead of months) * FY2021/22 general-account budget hits record Y106.6 trln - MOF * Govt sells Y43.6 trln in new bonds; tax income at Y57.4 trln * Debt dependency at 40.9% to fill budget gap as tax income sags * Japan aims to contain virus, spur economy; fiscal reform lags TOKYO, Dec 21 (Reuters) - Japan’s cabinet approved on Monday a record $1.03 trillion budget draft for the next fiscal year starting in April 2021, the Ministry of Finance said, as the coronavirus and stimulus spending puts pressure on already dire public finances. The 106.6 trillion yen ($1.03 trillion) annual budget marked a 4% rise from this year’s initial level and up for nine years in a row, with new debt worth 43.6 trillion yen making up 40.9% of revenue. From Europe to America, policymakers globally have unleashed a burst of monetary and fiscal stimulus to prevent a deep and prolonged recession as the pandemic shut international borders and sent many out of work. In Japan, fiscal reform has been shelved as Prime Minister Yoshihide Suga prioritised efforts to contain the pandemic and boost growth to shore up tax revenue. The spending plan, which came in line with a Reuters report out last week, must be approved by parliament early next year. It will be rolled out along with a third extra budget for this fiscal year as a combined 15-month budget aimed for seamless spending to ease the virus pain and back Suga’s goal of achieving carbon neutrality and digital transformation. With public debt at more than twice the size of Japan’s $5 trillion economy, by far the worst in the industrial world, fiscal reform is more of an urgent task than other countries. The government expects 4.0% real GDP growth for the next fiscal year, rosier than economists’ prediction of 3.4%. If the economy undershoots growth estimates, that would erode tax income and warrant more borrowing to fill a budget gap. The government’s fiscal 2021 primary budget deficit - excluding new bond sales and debt servicing - is seen at 20.4 trillion yen, more than double this year’s initial estimates, making the budget-balancing goal further elusive. ($1 = 103.3100 yen)