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. Last Updated: 07/27/2016

Social Spending Top Priority in 2002

President Vladimir Putin thanked the government Monday for the timely drafting of the 2002 budget and urged parliament to pass the blueprint.

The State Duma received the draft on Sunday. It foresees gross domestic product growth of 4.3 percent, inflation of 10 percent to 13 percent and aims for a budget surplus of 1.19 percent of GDP.

Putin urged government ministers to start consultations with parliament members to provide for the budget's smooth passage.

"It should be clear to anyone that all budget figures are justified and the targets the country posts [for 2002] can be achieved only on conditions of tight budget policy and financial discipline," Putin said in televised remarks.

He named raising salaries for workers who are paid out of the budget and servicemen and implementation of judicial, military and administrative reforms among 2002's priorities.

"It is necessary to focus on key issues to keep from wasting government funds … [and] provide for an unconditional pace of economic growth that would be the basis for achieving social targets," Putin told a Cabinet meeting.

The 2002 draft budget foresees revenues of 1.998 trillion rubles ($68 billion) and spending of 1.872 trillion rubles.

For the first time in years, social spending, set at 406.250 billion rubles, will exceed defense expenditure, set at 281.970 billion rubles. The government also plans to spend 289.734 billion rubles on state debt servicing in 2002.

Deputy Prime Minister Alexei Kudrin said Sunday the government was confident of meeting spending targets, even if world oil prices — key to budget revenues — fell.

"We will spend more [in 2002 than before], but even under the most pessimistic scenario … we will fulfill all budget obligations," said Kudrin, who is also finance minister.

Finance Ministry officials have said spending in the 2002 draft budget was based on a conservative oil price forecast of $18 per barrel for the Urals blend, which Russia produces. But in terms of revenue it is targeted at $22 per barrel. Urals traded at $26 per barrel Monday.

Alexander Zhukov, head of the Duma's influential budget committee, told reporters the Duma would discuss the draft budget in the first of four required readings before the end of September and forecast approval after tough debates.

He said deputies were likely to expect higher budget revenues and more generous spending on agriculture, industry and road construction and to question the financing of a so-called reserve fund, earmarked for rainy days.

"But in the end the budget should be approved as most deputies support the government," RIA Novosti quoted Zhukov as saying.

Zhukov praised the government's intention to pay due debts in full next year. "On the whole, the 2002 draft budget is better than in previous years and it clearly favors social spending," Interfax quoted him as saying.

Yury Maslyukov, former first deputy prime minister and a senior member of the powerful Communist faction, which often opposes government initiatives in the Duma, also approved of the bill.

"We are encouraged by a reasonable character of many government proposals, including … increased financing of many key items, such as social policy, healthcare, education, military and judicial reform," Interfax quoted him as saying. Zhukov said the budget committee would start debating the draft budget Sept. 7 or 8.