State Duma finally approves Russian budget

State Duma finally approves Russian budget

The Russian State Duma approved the draft budget for 2017 and the planned period of 2018-2019 in the third and final reading.

315 members of parliament voted for approval of the budget, 99 voted against it, TASS reports.

According to the draft budget, budget revenues will be 13.487 trillion rubles in 2017, 14.028 trillion rubles in 2018 and 14.844 trillion rubles in 2019. Expenditures will be 16.240 trillion rubles in 2017, 16.039 trillion rubles in 2018 and 15.986 trillion rubles in 2019. The federal budget deficit in 2017 will amount to 2.753 trillion rubles, and will gradually decrease to 2.011 trillion rubles in 2018 and 1.142 trillion rubles in 2019.

According to the Russian Finance Minister Anton Siluanov, the Russian budget for 2018 will be adjusted in the direction of greater industry support.

A professor of the RANEPA Chair of Economics and Finance of the Public Sector, Lyudmila Pronina, told Vestnik Kavkaza that, there will be some significant differences from the budget-2016 in the new Russian budget. "First, the budget deficit declined from 3.7% to the planned 3.2%. Second, social obligations have been preserved for the most part, and there was no sharp cut of expenditures on these articles, as in 2016. All the basic minimum social standards have been preserved, the cost of living has been reduced slightly, the maternity capital has been increased," she pointed out.

Another difference between the new budget is an increase in defense spending. "Nearly 3 trillion rubles will be spent on defense, which is a very high figure," Lyudmila Pronina said.
The budget 2017 expects certain investment growth. "We cannot say that the production figures will increase, their growth was recorded only in agriculture (about 3%), as well as chemical and defense industries, but still, incomes will help to increase investments. In 2017, we expect 0.3% growth. Of course, this is not enough, however, for the period of 2019-2020 growth of 0.7-0.9% is planned. For the most part it will be public investments due to enterprises' profit, but also through the private sector," the expert stressed.

"The inter-governmental regulations, the balance of financing regions and municipalities are also very important. There are a total of 17 donor regions, all the others are recipients. If now 2 percentage points from 20 of the companies' income are sent to the federal budget, with 18 percentage points going to regional budgets, then from January 1, the federal budget will receive 3 percentage points. Due to this, intergovernmental transfers will be increased by 121 billion rubles, while 100 billion rubles will go to the subsidized regions and 20 billion rubles to the donor regions," Lyudmila Pronina said.

This money will help to stimulate economic growth in the donor regions, create new jobs there. "These transfers will be issued on the basis of agreements between the Ministry of Finance and the region. In addition, the amount of intergovernmental transfers has been increased to 440 billion rubles. The improvement of the support system for the regions is a very serious moment of the new budget," the professor of the RANEPA Chair of Economics and Finance of the Public Sector noted.