Translated material
Let's catch up with the USSR
The State Duma approved the 2007 budget in the first reading
The State Duma on Friday adopted the draft federal budget for 2007 in the first reading. As expected, the deputies had virtually no questions regarding macroeconomic indicators. Regions, national projects and security have become priority areas for funding. Finance Minister Alexei Kudrin even promised to return to Russia the economic potential of the Soviet Union by the end of next year.Next year's budget is presented as part of a three-year financial plan for 2006-2008. It is planned that budget revenues will exceed expenses by one and a half trillion rubles (4.8% of GDP). Compared to the budget for the current year, revenues will increase by 13%, expenses will increase by 26%. The draft budget is calculated based on economic growth of 6% and annual inflation rates of 6.5-8%. The average price of Urals oil used as a basis for the calculation is $61 per barrel. The country's income, according to the project, will amount to almost 7 trillion rubles, the investment fund in 2007 will reach 110 billion rubles.
By the end of 2007, Russia will restore the GDP and industrial potential lost after 1990, Finance Minister Alexei Kudrin noted, speaking in the State Duma on Friday. By the end of next year, average per capita income in Russia will reach the highest level in the country's recent history, Mr. Kudrin hopes. Among the main objectives of the budget, the Minister of Finance sees improving the quality of life, reducing inflation and lending rates.
Financing of priority national projects will increase one and a half times compared to this year and amount to about 230 billion rubles. From September 1, 2007, public sector employees' salaries will increase by 15%. In addition, from January 1, military salaries will increase by 10%, and from December 1, 2007, they will increase by another 15% (however, this figure is not yet final; deputies in the second reading intend to insist on its increase). The basic part of pensions will be increased twice in 2007: from April 1, it will increase by 7.5% (in nominal terms), and from October 1, a fixed amount of the basic old-age pension will be established in the amount of 1,260 rubles.
Speaking about the budget expenditures included in the document, Alexey Kudrin said that the funds will be spent primarily on the regions, “This is the first priority - 235 billion rubles, 172 billion - support for the economy, financing of national projects - 240 billion rubles." - he clarified. A serious priority, according to the minister, is maintaining the combat effectiveness of the army and the security of the country. The costs for this will amount to 286 billion rubles. “This is a budget for strategic projects, which takes into account 12 programs for the development of infrastructure, innovation and regional problems in the amount of 224 billion rubles,” said the Minister of Finance.
As State Duma Speaker Boris Gryzlov said, no problems arose during the discussion of the budget. In the first reading, the Duma adopted the budget without changes (however, within the framework of the “zero reading”, the deputies achieved a significant increase in the expenditure side of the budget - by about 200 billion rubles). There will be serious amendments to the second reading regarding the distribution of appropriations between sections. Although it is most eloquent that all approvals of the budget were completed long before it was considered at the plenary session, it is evidenced by the fact that the deputies began to discuss the budget only in the afternoon, having first considered the amnesty bill.
The Communists traditionally opposed the budget project. According to deputy Vladimir Kashin, “the draft budget presented by the government not only does not solve the problems of a dying Russia, but rather preserves and multiplies them.” The budget, according to the communists, does not include the provision of social guarantees and the fulfillment of the state’s social obligations. United Russia, however, is ready to refute this thesis. According to Vladimir Pekhtin, vice-speaker of the State Duma from United Russia, 32 billion rubles are expected to be allocated for the implementation of the president's initiatives in the field of demographic policy in 2007, and this does not take into account payments of basic maternity capital. In addition to increasing salaries in the public sector in general, the indexation of bonuses for academic degrees and scholarships is separately discussed, he clarified.
The head of the Accounts Chamber, Sergei Stepashin, commented on the document in a traditionally critical manner, but within the limits permitted by his status. “The Chamber supports the adoption of the 2007 budget in the first reading, but intends to exercise the strictest control over all government spending, especially over those financed for the implementation of priority national projects,” he said. According to Mr. Stepashin, national projects “are not sufficiently linked to federal target programs, which may slow down their implementation.”
36 articles of the draft budget 2007 do not comply with the budget code, noted the head of the Accounts Chamber. Which, in turn, cannot contribute to the transparency of budget implementation.