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. Last Updated: 07/27/2016

Yeltsin Supports Defense Budget Raise

President Boris Yeltsin's chief economic adviser Friday said that defense spending could be boosted by another 6 trillion rubles ($3 billion) and gave a sneak preview of an upcoming wave of economic decrees. Alexander Livshits told a press conference that defense spending, listed at 40.6 trillion rubles in a draft budget awaiting parliamentary approval, could be increased by 6 trillion rubles without causing a huge rise in inflation. "Five or six is not dangerous," he said. The State Duma, the lower house of parliament, has already adopted the draft budget and is due to give final approval next week. But the Federation Council, the upper house of parliament, which has a strong defense lobby and the power to veto the draft, has already said it will only accept a budget with 55 trillion rubles in defense spending. Yeltsin can then still veto the draft budget. Yeltsin has supported a raise in defense spending, reportedly even to 55 trillion rubles. Livshits said that a 6 trillion ruble raise would boost monthly inflation by 1 or 2 percent later this year. He predicted that the inflation rate would fall to 6 to 7 percent rate in the coming months. Livshits added that Yeltsin is expected to sign a third wave of economic decrees that will simplify the registration of enterprises, crack down on untaxed cash payments and protect social services run by private enterprises. He would not say how many decrees there would be in total, nor when Yeltsin would sign them. In the past month, Yeltsin has signed 15 decrees on issues ranging from taxation to truth in advertising. One decree, Livshits said, would seek to streamline Russia's complicated and lengthy registration procedures, which both foreign and Russian businessmen say invite bribery. He said that the government, eager to boost tax revenues, would also try to discourage companies from using cash payments to avoid taxation, but did not explain what the new regulation would entail. Another decree would try to ensure that daycare centers, schools and hospitals now owned by large enterprises are not closed down or mismanaged after enterprises go private, Livshits said. He said that some enterprises had started using schools and daycare centers for private businesses, even casinos, and that others had simply stopped funding. Under the decree, these social services would either be handed over to municipal governments or be left to the enterprises under much stricter regulations. Two other decrees, on which Livshits declined to elaborate, would boost the construction of apartments for army officers and order defense plants to start using production lines that are now kept in reserve for defense emergencies.