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State Duma to consider law on 2016 budget in third reading

December 04, 2015, 9:56 UTC+3
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MOSCOW, December 4. /TASS/. The Russian State Duma lower house of parliament will consider at a plenary meeting on Friday the law on the 2016 federal budget in the third and final reading. In accordance with the Budget Code and the house rules of procedure, the third reading is legal-technical in nature and does not envisage any significant changes to the text of the law.

In addition, the law on the 2016 budget and its annexes with all the adjustments will be posted on the official website of the State Duma on Friday.

The draft budget, submitted by the government, has been adopted by the Duma in the first and second readings of November 13 and December 2, respectively, finalised with taking into account the requirements of the parliamentary factions.

The lawmakers did not increase the expenditure in the 2016 budget, but increased social spending and funding of some sectors of the economy, including agriculture, machine-building, aircraft building and shipbuilding, power engineering, construction and restoration of roads, by means of redistribution of budgetary means.

According to the head of the Duma Committee on Budget and Taxes, Andrei Makarov, the committee has received a total of 562 amendments, 147 of which have been adopted.

One of the main amendments of the second reading is related to the provision of budget credits in 2016. It stipulates that next year, budget credits will be provided to the Russian Federation constituent entities in the amount of up to 310 billion roubles instead of 140 billion roubles, fixed in the first reading.

Representatives of all factions of the State Duma supported the author of this most significant amendment. Thus, parliamentarians have proposed to significantly widen in the 2016 draft budget law the opportunities for providing credits to regions at 0.1% annual interest.

The 2016 draft budget law says that the money may be used to partially cover the budget deficit of the regions, cover the temporary cash shortages arising in the process of execution of regional budgets, as well as activities related to the management of natural and man-made disasters.

In addition, the Duma members specified in the text of the country’s main financial document the mandatory allocation of funds for the construction and repair of schools - 50 billion roubles; 43 billion roubles - for projects in Crimea; 9 billion roubles for support of agriculture; 15 billion roubles - for the financing of science.

The draft law "On the 2016 Federal Budget" stipulates that the projected total amount of revenue should reach almost 14 trillion roubles. The expenditure is planned in the amount of slightly more than 16 trillion roubles. The budget deficit will amount to 2.4 trillion roubles (3% of GDP), inflation should not exceed 6.4% (December 2016 to December 2015).

In his annual state-of-the-nation address to the Federal Assembly on Friday, Russian President Vladimir Putin said that the federal budget for 2016 should be balanced with a deficit within 3% even if revenues turn to be lower than expected. Stability of the budget is a matter of national security, he added.

Expansion of the economic freedom and an improved business environment could be a response to sanctions, the President said. "I see freedom of enterprise as a key economic and social issue. And through this - freedom of enterprise and its expansion - we have to respond to all the attempts to impose limitations on us," he said.

The president also suggested the recapitalization of the Industry Development Fund by 20 bln rubles ($295 mln) in 2016. Meanwhile, products made within the import substitution programmes framework should meet international standards and compete on global markets, Putin said. "It should be once again stressed that we will support only competitive local production sites. No one should have illusions that hiding behind import substitution one can clap on imitations and dead articles triple the price to the government and citizens," President said, adding that "Russia needs companies, which are able not only to provide the country with competitive high-quality products but to tap global markets."

Support measures for domestic companies will also include fiscal support of the domestic corporate bonds market and support of agricultural sector, the president said. Putin also proposes to establish a special project office to support major projects, such as growth of major Russian operators in e-commerce. "One of such projects may be to create large private companies in e-commerce, so that Russian goods are supplied over Internet to all countries of the globe. We have products to offer," the president said.

The adopted law will be sent to the Federation Council upper house of parliament on Friday.

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