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Putin names 7 unsettled problems in Russian economy

June 28, 2012, 17:18 UTC+3

Russian President named a major non-oil and gas deficit as the first problem

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MOSCOW, June 28 (Itar-Tass) — Russian President Vladimir Putin named seven unsettled problems in Russian economy.

The Russian president noted several achievements in the Budget Address and the scope of problems that remain unsettled in Russia.

Putin named a major non-oil and gas deficit as the first problem. “The Russian budgetary system remains highly dependent from the situation on the world primary markets: therefore opportunities for budget adjustment are limited for a substantial growth of budget expenditures in the spheres, which condition economic development of the country, even with the idea of the fair need for these expenditures,” he noted.

Putin noted that the second problem is a non-optimal structure of budget expenditures. “The budget allocations made to meet the needs of economic development of infrastructure projects, projects in education and science, which are the spheres shaping the image of Russian economy, are obviously insufficient,” the president stated.

Putin also noted a low level of financial and economic grounds for the decisions, which result in new spending commitments. “The assessment is not quite qualitative over long-term consequences, which new commitments for the Russian socio-economic development will have, and how it will be linked with other trends in the state policy and what influence it will have on the scope of current commitments,” the president noted.

Putin believes the need for a higher efficiency of budget expenditures as the fourth task, because the current socio-economic effect is disproportionate to the amount of expenditures for various purposes.

The fifth problem concludes in the fact that inter-budgetary relations do not fully seek for the encouragement of regional and municipal authorities to the creation of conditions for business and investment activities. “A high dependence of regional and local budgets persists from financial aid, which is given from other budgets of the Russian budgetary system,” he noted.

Putin also emphasized that the budgetary policy remains mainly unclear for the society, “the need and the essence of concrete decisions and actions of the state authorities in this sphere are not spelled out in the proper way.”

The president believes that the seventh problem concludes in the fact that the practice of constant fragmental amendments in the tax legislation was not avoided. “Even in view of better taxation conditions for business activities this factor conditions the need for the constant monitoring of changes and adjustments in the financial plans that entails additional costs, particularly for small and medium businesses,” he believes. “Constant expectations of such changes hamper the implementation of long-term investment projects for the reason of a low predictability of tax payments in the development of business plans,” Putin said with confidence.

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