UPDATE 2: PM: Russia to raise support of regions by 9% to 1.6 tln rbl in 2017

(Adds details in last paragraph)

MOSCOW, Dec 28 (PRIME) – Russia will increase regional support by 9% to 1.6 trillion rubles in 2017, Prime Minister Dmitry Medvedev said at a meeting on measures to ensure regional budgets’ balance on Wednesday.

“The support will be increased by about 9% next year as compared with this year. This was not the easiest task in conditions of a tight budget. The total amount of interbudget transfers is planned at a level of almost 1.6 trillion rubles,” Medvedev said.

Subsidies to the regions will grow as well, he said.

According to Medvedev, as a result of these measures, the overall amount of regional budget deficit is expected to almost halve by 2019.

The prime minister said that subsidies to regions must become more targeted, “We must stop the practice of distribution of subsidies in accordance with the principle ‘money draws money’. Targeted transfers should address the needs in development of regional branches of the economy, the social sphere and other major components in the first place, not be simply sent to regions, furthermore, to donor regions which can finance the relevant measures on their own.”

The regions receiving subventions will have to undertake obligations to raise economic potential and minimize inefficient spending from 2017, he said.

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