The Ministry of Finance calls for less money to redistribute through the budget

MOSCOW, November 13. Finance Minister Anton Siluanov urged to withdraw less money from the economy, redistributing them through the budget: the more means remains at the Russian enterprises, the more effective they will be used and the higher economic growth.

The state Duma on 13 November, is considering the budget for 2016 in the first reading. According to the document, the expenditure budget next year will amount to 16 trillion 098,7 billion, revenue of 13 trillion 738,5 billion rubles, the deficit – $ 2 trillion to 360.2 billion, or 3% of GDP.

“The total expenditure next year is planned in the amount of 16.1 billion rubles, which amounts to 20.5% of GDP. We must strive to reduce costs, as a percentage as a percentage of GDP. This will give us the impetus to economic growth,” – said Siluanov, speaking at the plenary session in the state Duma.

More money for the economy

The Minister recalled that before 2008, the level of exclusions from the economy, which were redistributed through the Federal budget, amounted to about 15-16%.

“And then we grew up the tempo from 5% to 7% per year. Therefore, the question of the redistributive processes through the Federal budget, it affects, of course, on the situation in the economy,” he said.

The more resources remains economic entities are, the more effective they are used to ensure economic growth, Siluanov said.

Cost optimization

Siluanov reminded that the major significant decisions that affected the budget were adopted in early 2015.

“We have streamlined our expenses. Identified priorities in these costs has reduced expenses by 10%. According to the main priorities have been saved all our spending on non-core was carried out prioritization”, he said.

The Minister noted that this policy will continue in 2016.

“We proposed to continue for 2016 is also a more precise structuring of our costs and concentrating resources solely on the priority commitments,” he said.

The Treasury on guard of Finance

The Minister also noted that next year measures will be taken aimed at improving the efficiency of government spending.

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Anton Siluanov, Minister of Finance, about the use of the contingency Fund

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“We plan to take on Treasury support all costs associated with the investment expenses, in the amount of 100 million rubles. They will all pass through the Treasury system… These funds will be in the budget system, and will not be used, as today it happens often, in the form of advances on accounts of commercial banks,” he said.

The Minister said that until April 1, the Federal Treasury will be transferred all previously unspent contributions from the budget that were made to the Charter capital and funds of state companies and state corporations.

“And before July 1, to decide whether we need this money for these companies or we can pick them up in the Federal budget,” he said.

Siluanov added that the government will “accelerate the adoption of this decision, and will endeavour to do it much earlier.”

Risks and growth

In preparing the budget for next year, the government was guided by the same basic principles that began to be implemented in 2015 – adaptation of budget policy to the new external economic conditions, said the head of the Ministry of Finance.

In the baseline scenario for 2016, the budget, next year’s GDP growth at 0.7%, inflation is projected at 6.4%, while the average annual oil price of 50 dollars per barrel. The average annual exchange rate used in the budget for 2016, is projected to be 63.3%.

Thus, according to the calculations of the Ministry of Finance, due to the fact that the ruble may be higher than previously forecast, the reduction of budget revenues in 2016 may be about 1 trillion rubles.

“We see risks of budget execution. Primarily the risks that are there today. This is the oil price, lower than the forecast, the exchange rate, which is also different from the forecast data. Only this position gives us risks to reduce income per trillion roubles. We must take seriously the spending of the reserves built into the budget,” he said.

Siluanov stressed that the task to be achieved by budgetary policy in the coming years is the achievement of budgetary stability in the medium term.

“I would like to say that the key task of budgetary policy is to ensure the welfare of our citizens and the improvement that can only occur with economic growth. And economic growth can be sustainable only if the adoption and implementation of prudent fiscal policy,” he said.