The government is learning to plan budgets and investments several years in advance
Yesterday, Finance Minister Alexei Kudrin and the head of the Ministry of Economic Development German Gref informed the Russian President about the proposed changes to the Budget Code necessary to reform the budget process. We are talking about the transition to a “rolling three-year plan”: from now on, the federal budget will be adopted not for a year, but for three. At the same time, the State Duma was proposed to limit itself to three budget readings instead of four. The government is confident that the three-year budget will allow budget recipients to plan activities for the medium term and avoid the vicious practice of emergency spending at the end of the year.
Formally, the bill submitted to the State Duma last week is called “On Amendments to the Budget Code of the Russian Federation and the Revocation of Certain Legislative Acts of the Russian Federation,” but the changes are so significant that it is quite possible to talk not even about a new edition of the code, but about a new code as a whole . The significance of the changes apparently predetermined interdepartmental disagreements during the preparation of the budget. Vladimir Putin asked the ministers whether they managed to overcome them. It turned out that it was not completely. According to Alexei Kudrin, it was decided to resolve the remaining disagreements with the help of regulations. German Gref added that “there are still technical details that we will work out together for the second reading.” According to the minister, “they are not of a fundamental nature.” “The procedure that has been agreed upon significantly advances the entire process (budgetary - Ed. ), makes it transparent for investors and customers,” German Gref is confident.
The introduction of a government bill to the State Duma with disagreements within the cabinet itself is an extraordinary case. However, the government simply had no other choice. Failure to adopt amendments to the Budget Code during the spring session would put an end to the idea of adopting a three-year budget this year. Moreover, on the initiative of the president, the country's main financial law should be approved in mid-July. Vladimir Putin motivated the need to approve the budget earlier than usual by the unacceptability of discussing and adopting one of the most important laws in the context of political struggle before the December elections to the State Duma.
“You reported that the technology for preparing investment programs does not allow high-quality work in a three-year plan,” the president reminded Mr. Gref. “We agreed on a transition period, during which we will have to rework all existing federal targeted programs and adopt new programs in the context of a new methodology. We will have to actually change all processes related to investment planning, but we agreed that within three years we will be able to completely update the entire regulatory framework,” said the head of the Ministry of Economic Development. As Mr. Kudrin explained, over the next three years the practice of annually forming investment programs will continue, and then money will be allocated for the entire period of implementation of a specific investment program. According to the Minister of Finance, this will improve the efficiency of investment programs and put an end to long-term construction and unfinished construction. He noted that according to the bill, from 2010 the government will make decisions on the preparation and implementation of investment projects worth more than 600 million rubles. Decisions on all other projects will remain with the main managers of federal budget funds, for example ministries and departments.
Alexey Kudrin and German Gref will discuss issues of forming investment policy for the next three years at a special meeting this week. In addition, as the Minister of Finance emphasized at yesterday’s meeting with the President, in February it is necessary to decide on the proposals of the Ministry of Finance and other departments on the fate of the stabilization fund, the creation of the Fund for Future Generations, as well as on “proposals on expenses related to oil expenses.” “The discussion of this block of issues must be completed in February, and then submitted to a government meeting,” Mr. Kudrin said.
Meanwhile, the State Duma has already begun work on amendments to the Budget Code. According to First Deputy Chairman of the Committee on Budget and Taxes Vitaly Shuba, the Budget and Tax Committee has drawn up a schedule for considering the relevant bill: March 7 - first reading, April 6 - second, April 11 - third. The law will then be sent to the Federation Council. Only after this, that is, at the end of April, will deputies begin discussing the first draft of the three-year budget.