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Russian budget for 2014-2016 to be sequestered

October 01, 2013, 11:37 UTC+3

The expenditures for education will be cut by 13% in 2014 and will grow by 19% for defense

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On Monday, the Russian government submitted for consideration the draft federal budget for 2014-2016 in the State Duma lower house of Russian parliament, Komsomolskaya Pravda daily reported. Russian President Vladimir Putin has discussed the draft budget with the key ministers on the same day.

Finance Minister Anton Siluanov said at a meeting chaired by the president that the draft budget envisaged all monetary funds for the fulfillment of the May 7 Russian presidential social decrees. As much as 2.1 trillion rubles (about $64.6 billion) were allocated for their fulfillment in the federal budget. The minister also said that about 40 billion rubles are expected to allocate for the restoration of the flood-hit Far East.

From 2014 to 2016 the growth of financial resources for all guidelines of the health care system is expected, Health Minister Veronika Skvortsova reported. Defense Minister Sergei Shoigu noted that all parameters of the state armament program up to 2020 are kept in the budget in terms of quantity and deadlines. The budget has set the key parameters for the adjustment of all social allowances to the inflation rate, Minister of Labor Maxim Topilin said.

“No matter how heated the debates on the budget were expected, a five-percent sequestering of the budget is inevitable,” Moskovsky Komsomolets daily noted. The expenditures for education will be cut by 13% in 2014 and will grow by 19% for defense, the daily reported.

The second largest sequestered budget article is expected to be social policy with the spending on it to be cut by 82 billion rubles ($2.5 billion) or two percent against 2013. The health care system may be deprived of nine percent of all current resources or 44 billion rubles ($1.3 billion). Even the budget spending on the housing and public utility sector, which is on the brink of depreciation and under threat, is expected to be cut almost by one fourth or 37 billion rubles ($1.1 billion).

The image-making megaprojects turned out to be unalterable. For instance, the expenditures for physical culture and sports will grow by one fourth in 2014 over the FIFA World Cup in Russia in 2018, Moskovsky Komsomolets daily noted.

Kommersant daily noted that the September amending of the already drafted budget is considered to be stronger measures of precaution in view of a possible new world economic crisis that may be comparable to the crisis in the autumn of 2008 through the first half of 2009. Meanwhile, any slumps in world and Russian economies are not envisioned in the draft budget. To say the least, the draft budget proposes the stagnation of oil prices at the level of $100 per barrel, the stability of investment and ruble.

“With this budget we will pave the way from stagnation to recession quite officially now,” Nezavisimaya Gazeta daily quoted Director of the Institute of Strategic Analysis “Financial and Accounting Consultants” Igor Nikolayev as saying. The draft budget does not suit at all the Communist faction in the State Duma that intends to pass a motion of non-confidence to the government in October. For his part, analyst of the Investcafe agency Timur Nigmatullin is quite optimistic about the issue. In his view, thanks to cutting of alterable articles by 5-10% the budget is quite feasible in the set parameters.

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