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Putin demands preventing excessive spending of reserves, state debt growth

September 28, 15:26 UTC+3
The president stresses that measures suggested by the government should not entail suppression of business activity
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©  Alexei Nikolsky/Russian Presidential Press and Information Office/TASS

MOSCOW, 28 September. /TASS/.  Neither excessive spending of reserves nor state debt growth are acceptable when preparing the budget for 2017 and 2018-2019 planning period, Russian President Vladimir Putin said on Wednesday.

"Neither excessive spending of reserves nor dramatic growth of the government debt are acceptable," the President said at the meeting on budget issues. "As far as the government finances are concerned, assurance of their stability and balance remains the paramount task," the President said.

"We have to maintain the federal budget deficit. Truly, it is in parameters that are absolutely acceptable but we need to proceed from reliability of sources to cover it," Putin added.

Putin has also demanded the government to bring inflation to a 4% level in the medium term.

"In the medium term we need to reach the level of inflation at 4%," he said at a meeting on budget issues.

"The macroeconomic situation remains difficult, the Russian economy is gradually overcoming recession, but the positive trend is still unstable. I would like to stress the need to provide such macro-economic conditions that boost the growth of the national economy and keep trends of inflation reduction," Putin said.

The head of the state noted that the work of the government over the federal budget draft is entering the final stage.

"Before November 1, the draft should be submitted to the State Duma of the seventh convocation. I am sure that working on the main financial document of the country the government will be able to establish a constructive dialogue with the new line-up of the lower house of parliament," Putin said.

The President noted that at today's meeting the key aspects of the fiscal policy will be discussed but it is also necessary to "reach concrete decisions on the main parameters of the future budget.".

Collectability of taxes must not entail suppression of business activity

The Russian leader noted that measures suggested by the government to improve collectability of taxes should not entail suppression of business activity.

"I am aware the government is examining different options of improving taxes collectability in certain sectors of the economy and would like to stress once again: these measures should not lead to suppression of business activity that is just recovering," the head of state said. The need exists "to proceed with reduction of federal budget’s dependence on oil prices," Putin said.

"Administration should be improved and collectability of taxes and other fees, particularly VAT and customs duties, should be higher," Putin said.

Social obligations in 2017 budget

The president  has demanded to place emphasis on social obligations, including the preparation of the budget for 2017 and the planning period.

"It is necessary to pay attention to planning of budget spending, to focus on meeting social obligations, to continue working on making budget spending in the social sector more effective," the head of state said.

According to Putin, social spending "should be more targeted, as we have already said many times, and effective."

The president also urged the financial support of priority projects in health, education, housing sector and road infrastructure, as well as the support of small and medium-sized businesses, and some other areas. "The funds for these purposes should be included in the budget in full," Putin said.

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