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. Last Updated: 07/27/2016

Duma Gives '06 Budget a First Nod

The State Duma on Thursday gave preliminary approval to the 2006 draft budget, which will sharply raise government spending using billions of dollars from oil revenues, passing it on the first of four votes.

Revenues are expected to total a record 5.046 trillion rubles ($177.87 billion), and spending 4.27 trillion rubles -- a 40 percent rise in spending from the 2005 budget.

Finance Minister Alexei Kudrin told the lawmakers that when working on the budget, "the government proceeded from strategic priorities of state policy, that is improving the quality of life of the population, getting rid of poverty, supporting high economic growth, improving the quality of economic growth and curbing inflation."

The Duma approved the draft by a vote of 337 to 92, with two abstentions. The budget could undergo significant changes before the fourth and final reading.

The budget surplus is expected to be 776 billion rubles ($27.35 billion), equivalent to 3.2 percent of gross domestic product -- taking into account that part of the oil revenues are diverted into the stabilization fund.

Kudrin said the key priorities in the budget, which will increase government wages and pensions as well as military spending, were supporting social reforms and national security.

Spending on education will rise by 29.5 percent and that on health care by 64.6 percent, he said, adding that over the next three years government wages should rise three times.

"This is the first attempt in recent years to mobilize the budget policy for the resolution of key problems of social development," the head of the Audit Chamber, Sergei Stepashin, said.