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Russian Government allocated 1.4 trillion rubles to support economy

This is some 1.2% of GDP

NOVO-OGAREVO, April 1. / TASS /. Russian Finance Ministry reserved funds in the amount of 1.2% of GDP for measures to combat coronavirus and to support the economy, said Prime Minister Mikhail Mishustin on Wednesday, while speaking at a meeting with the Russian President Vladimir Putin with members of the government.

"In total, the Russian Finance Ministry reserved 1.4 trillion rubles (1.2% of GDP) for the purpose of combating the spread of coronavirus and implementing anti-crisis measures," Mishustin said.

He emphasized that Putin has given the government the task of supporting citizens and the economy. "All the preparatory work was carried out by us as expeditiously as possible. Within a day, we formed the necessary changes to the legislation and the very next day, March 26 - we discussed them at a government meeting," Mishustin reported, adding that the State Duma and the Federation Council approved federal bills, which provide for the implementation of the initiatives proposed by the President.


Population Support


Mishustin said that the adopted bills provide for automatic prolongation of monthly payments in connection with the birth or adoption of the first or second child and for new payment of sick leave based on the amount of at least minimum wage. The Ministry of Labor, he said, also gave the appropriate instructions to the regions on the extension of regional social benefits.

"Accelerated lump sum payments to veterans and home front workers are already being prepared for the 75th anniversary of the World War II Victory . They should take place before the end of April," the Prime Minister said. He added that he instructed to accelerate payments for families with children ages 3-7 inclusively not starting in July, but a month earlier.

In addition, a government decree was signed and entered into force to increase the maximum amount of unemployment benefits to minimum wage level. "About 30 bln rubles will be additionally allocated for this," said he.

Mishustin noted that through amendments to the legislation, the government facilitates the bankruptcy of individuals. "It will become free. For this, it will be necessary to independently or through the multi-service government center to file information in the Unified Federal Bankruptcy Information Register, which will allow people with a debt size of more than 50,000 rubles, but not more than 700,000 rubles, to get rid of debt obligations," he explained.


Assistance of Business


The government has adapted an entire package of measures to support entrepreneurship in Russia. "To protect enterprises, a six-month moratorium on initiating bankruptcy cases has been put into place. Enforcement proceedings and the imposition of fines and penalties are suspended for the period of the moratorium, and the conclusion of amicable agreements on arising debts will be simplified," said he.

The bills also provide for tax deferrals for small and medium-sized businesses, excluding VAT, and financial support and insurance premium for micro enterprises. "There we laid down a two-fold reduction in the size of insurance premiums for SMEs from 30 to 15% as of April 1, if the employee’s salary exceeds the minimum wage," Mishustin said.

He recalled that, together with the Central Bank, the government has developed measures to provide SMEs with a six-month deferral of interest and principal on loans. This program will cover a loan portfolio of about 500 bln rubles.

"We make individual decisions to support the most affected sectors of the economy - including catering, domestic services, air and travel companies, sports, culture, cinemas," Mishustin emphasized. "In particular, we prohibited sending requests to them before May 1 about paying taxes. " According to him, all small companies that work in these sectors will also be able to transfer payments on loans for six months. "The corresponding government decree will be signed in the near future," he assured.

Mishustin also spoke about the support of air carriers. These companies will receive 1.5 bln rubles to compensate for the costs associated with the evacuation of people from other countries in connection with the spread of coronavirus infection. For travel agencies, the contribution to the reserve fund of the association of tour operators in the field of outbound tourism has actually been canceled.