Reducing spending on state programs: how it will affect the economy of the regions

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Reducing spending on state programs: how it will affect the economy of the regions
Reducing spending on state programs: how it will affect the economy of the regions
5 July, 19:48EconomyPhoto: Фото: igrajdanin.ru
Professor of the Department of Economic and Social Geography of Russia, Lomonosov Moscow State University M. V. Lomonosov, economist Natalya Zubarevich called the Finance Ministry's course to reduce spending on state programs completely predictable.

And senators and deputies of the State Duma consider the agency's initiative dangerous.

Yekaterina Maksimova

In the next three years, the department proposes to cut funding by 1.6 trillion rubles.

“This means that investment costs will be partially cut. Expenses for scientific and technical developments, and the released resources will be redirected to social support of the population, to payments to state employees. They {the government of the Russian Federation, - approx. ed.} understand that regional budgets will be in deficit in these years. This means, as usual, fewer roads, less modernization of the transport system, less money for scientific and technical developments, for transport construction - the constituent entities of the Russian Federation will repair intra-regional and intra-city roads less and more slowly. We will meet these years with the scale of patching. In the 90s, they lived, remember, about the same”, - commented economist Natalya Zubarevich to Novye Izvestia.

Deputy of the State Duma, member of the Duma Committee on Budget and Taxes Oksana Dmitriyeva considers the initiative of the Ministry of Finance harmful and useless:

"Now the most important task is to prevent a decline in production, to form an effective government demand, including investment. There are revenues, the federal budget is in surplus. And now it is being executed with a surplus. Against this background, there is talk about saving up, that money should not be spent, and not all oil and gas revenues should be directed to the budget. Therefore it is absolutely harmful, unfounded things. Foreign policy situation has completely changed, and the financial and economic bloc of the government is acting according to old recipes”, - Oksana Dmitriyeva assessed and added that she personally would vote against such an initiative.

The authors of the tg-channel "ProCurator" also called the signal from the Ministry of Finance disappointing. “Of course, for the majority of Russians, this news will get bogged down in the information flow, diluted with a strong ruble and a lower rate on preferential mortgages. {…}. At the same time, there is a popular opinion in the expert community that the consequences of the macroeconomic situation will still affect the budget in the future. Optimization is a strong contender for the Most Used Newspeak award in the coming years”, - writes ProCurator.

Troubled Senator Kurgan region Sergey Muratov offers to wait for a detailed document, which will contain specific figures and cut spending items, but is already showing concern.

"Before for the same road construction, a development course was taken. And now to reduce subsidies for roads is very undesirable. Specifically for the Kurgan region, where the tracks have not been repaired for so many years, this is vital. This directly affects the quality of life of people”, - said Senator Muratov. To clarify: the budget of the Kurgan region is traditionally in deficit. In 2022 he is projected at the level of 62.3 billion rubles. Most of it is gratuitous receipts from other budgets of the budget system of the Russian Federation - 35.7 billion (grants, subsidies, subventions). And the level of public debt region at the same time as of July 1 is 16.7 billion rubles.

Earlier, the Ministry of Finance recorded the following statistics: in 2022, a deficit was recorded in every fourth regional budget.

The consolidated income of the regions in January-May 2022 increased by 27%. Natalya Zubarevich explains that the still positive dynamics was influenced, among other things, by income tax, which is paid in advance. “By the end of the year, many enterprises will no longer have such profits. The decision of the Ministry of Finance is logical, I expected something like this scenario. All the songs are about the fact that we will develop huge investment projects - where is the money, Zin?”, - added Natalya Zubarevich. Personal income tax in the regions has already fallen: in April, tax revenues from personal income decreased by 11%. This is evidenced by statistics on the consolidated budget from the Ministry of Finance.

The Ministry of Finance proposes to reduce budget expenditures by a total amount of about 1.6 trillion rubles. From 2023 to 2025, federal budget spending will be reduced annually by more than 530 billion rubles. Such data follow from the methodology for calculating the marginal basic budget appropriations of the federal budget. Vedomosti refers to the document of the Ministry of Finance.

The sequestration will affect 59 out of 62 state programs. Over the three years, spending on the state programs "Development of the transport system" (more than 390 billion rubles) and "Scientific and technological development" (150 billion rubles), "Ensuring the country's defense capability" (120 billion rubles) will be reduced the most. At the same time, due to the indexation of payments to the military and due to unplanned purchases, defense spending in 2023 under the state program will increase by 27 billion rubles.

At the same time, the Ministry of Finance clarifies that the curator of the state program will independently have to decide which expenses to refuse. The decision itself was made in order to prioritize budget expenditures and concentrate the remaining funds in the most important areas.

It should be noted that the state program "Development of the transport system" consists of several areas. The main goals of the program are to increase the share of regulatory roads of regional and intermunicipal significance to 50.9%, “accelerate the flow of goods based on improving the quality of transport infrastructure by 5.7 percent compared to 2021”, increase the availability of high-quality transport services to the population, and reduce the number of accidents.

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