Kudrin says govt may fall short of funds for Putin’s May Order

MOSCOW, Jul 9 (PRIME) -- The money that the Finance Ministry has earmarked for a recent May Order of the President Vladimir Putin in 2019–2021 may not be enough, Head of the Audit Chamber Alexei Kudrin said on Monday at a meeting of the State Duma, the parliament’s lower house.

On July 8, the ministry said in its main directions of a three-year budget policy that the government’s spending on the May Order may reach 1.17 trillion rubles in 2019, 1.25 trillion rubles in 2020, and 1.47 trillion rubles in 2021.

“The funds…have been earmarked, but they are not distributed according directions and national programs. This is how we see that the government is yet undecided about its priorities, which worsens singling out of main directions of the budget policy significantly …I want to say preliminarily that the funds may not be enough to fulfill the goals of the presidential order,” Kudrin said.

The ministry also expects privatization revenue to fall to zero in 2021 from 13 billion rubles in 2019, but the government should privatize more and use the money on priority projects, he said.

“As I see it, revenue from privatization has not been adequately calculated. We had revenue of almost 100 billion rubles in the previous three-year period…while we expect it to reach only 24 billion rubles in the next period. The share of the state in the economy has raised, we should use this as an investment source for priority projects more actively,” Kudrin said.

The increase of the cut-off oil price under Russia’s budget rule, which sends additional incomes from oil exports to state reserves, to U.S. $45 per barrel from $40 could delay an increase of value-added tax (VAT) for six years, he said.

Russia will raise VAT to 20% from 18% starting from 2019.

“I thought that we could make the budget rule, which currently stands at $40, softer in the coming years and make it grow to $45 per barrel. We wouldn’t have to raise VAT now…I think that we would still have to raise VAT eventually taking into account the current trends in the economy, but we could have delayed the increase for six years, and I am absolutely sure about it,” he said.

(63.1216 rubles – U.S. $1)

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