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Twenty-two million Russians stay beyond poverty line

The problem of poverty in Russia is most likely to intensify in the coming years, experts say

MOSCOW, July 23. /TASS/. The problem of poverty in Russia is most likely to intensify in the coming years, experts say. While the Russian authorities are taking measures to provide social support to the population, these efforts are insufficient to reverse this trend.

About 22 million Russians are living beyond the poverty line in Russia, Vice-Premier Olga Golodets said recently, citing official statistics. She said these figures were "absolutely critical."

The Russian government has recently supported the proposal by the Finance Ministry to freeze social payment indexation in order to save budget funds. The government’s social bloc led by Vice-Premier Golodets insists on indexing pensions and social payments in full, i.e. adjusting them in line with inflation.

"Public sector wages and servicemen’s money allowances actually have not been indexed in 2015," First Deputy Head of the State Duma Committee for the Budget and Taxes Oksana Dmitriyeva told Ekho Moskvy radio station.

"And these indexations are not expected next year. Efforts have failed to secure the pension indexation by the inflation rate in 2016. As a result, the situation will only worsen," she added.

"Various calculations and studies show that only 20% of the population is financially comfortable in the country," Director of the Institute of Economics at the Russian Academy of Sciences Ruslan Grinberg said.

"For a half of the population, life is a fight for survival," the expert said.

"Economic growth is the best medicine against poverty," Director of the Center for the Analysis of Incomes and Living Standards of the Population at the Higher School of Economics Liliya Ovcharova told TASS.

"If growth is absent, social support for the poor is the second most important measure. Social support should be allocated in a way to make the poor a priority group entitled to social allowances. In our country, however, priority is given to the status of belonging to a certain category and this category does not always embrace the poor," the expert said.

All subsidies for transport rides, housing and utility payments are provided without control of incomes, she added.

It can’t be said that nothing is being done, Ovcharova said.

"There are compensatory payments in addition to pensions: each pensioner is guaranteed an individual income at the level of the subsistence minimum. Russia also has monthly child allowances for low-income families and a housing subsidy for the poor. Russia also has a whole number of targeted regional programs for low-income people," the expert said.

But now attempts are being made to cut social expenditures and spend the money saved from these cuts on something else, she added. These plans envisage cutting expenditures without increasing support for the poor, the expert said.

"The poverty problem in Russia will only intensify in the near future," she added.

The Russian government is taking measures to fight poverty within the existing possibilities, Head of the Laboratory of Pension Systems and Social Sphere Forecasting at the Russian Presidential Academy of the National Economy and Public Administration (RANEPA) Yelena Grishina told TASS.

"Another thing is that these measures are not enough. But, perhaps, it is wrong to look for funds for overcoming poverty only as part of the social protection system. This is a more comprehensive task and should be addressed, among other things, through assistance to employment and the maintenance of household incomes," the expert said.

The transition to more targeted social support is an area, which the government is currently implementing on the Russian president’s instruction, she added.

"The category of social allowance recipients is limited to persons with incomes below the subsistence minimum while the size of allowances does not increase. Social assistance that is provided is insufficient to bring people out of the state of poverty," the expert said.

That is why, the task is both to redirect assistance to the support of low-income people and increase the size of social payments, she added.

"But considering that social support is normally provided regionally, this task is hard for implementation in the current conditions," the expert said.

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TASS may not share the opinions of its contributors