Lagging Russian Regions to Receive $1.5mn More in Government Aid

Additional financing to solve the most pressing acute problems in 10 Russian regions with a low level of socio-economic development will in preliminary estimates amount to 100 billion rubles ($1.5 million) over 5 years, Deputy Prime Minister Vitaly Mutko told reporters on Thursday.

“Today, all federal departments have been given the task of prioritizing national projects that are being implemented in these regions. And we also agreed that it will be allocated, tentatively 100 billion rubles for the next five years to eliminate the most pressing problems,” he said.

In April this year, the government moved to take tighter control of regional debt, the build-up of which nearly caused a crisis only two years ago.

The State Duma Committee on Budget and Taxes is supporting a proposal by the Finance Ministry to tighten control over expenditures and debts of the regions as part of an extensive overhaul of financial controls that has been in place since economic growth stalled in 2013.

The tax system has been overhauled and the tax service given a new IT system that saw the tax take increase by 20 percent in 2018, despite the fact that the tax burden remained largely the same. Likewise, the powers of the Audit Chamber, now headed by former finance minister Alexey Kudrin, have been expanded and given permission to inspect regional finances. And the IT revolution is continuing as IBS, Russia’s leading software company, is putting regional treasury operations into the cloud and vastly improving their efficiency.