The draft federal budget for 2021-23 should include additional resources to ensure the country’s defense capability, said Russian President Vladimir Putin during a video conference meeting, which was attended by Prime Minister Mikhail Mishustin, his deputies, the Ministry of Finance and the Central Bank, as well as officials of the presidential administration and the General Staff of the Armed Forces.

The coronavirus epidemic and forced restrictions “literally froze the global economy,” Putin said.

The depth of the crisis in Russia “turned out to be very serious” and its negative consequences are “tangible” for citizens and businesses, the president added: the fall in GDP was 12% in April and 10.9% in May, more than 3 million people applied for unemployment benefits.

“The situation required operational measures, and thanks to the reserves accumulated in recent years, it was possible to “alleviate the leverage of certain sectors of the economy, enterprises, business in general, employees of enterprises and organizations, to preserve the income of Russian families,” Putin said.

“The scope, coverage, the scale of support for citizens, business during the epidemic have become unprecedented for our country, of course,” the president said. These were “point measures,” he said, adding: “In some countries, aid was much, much larger, but we got exactly where we wanted to be.”

Thanks to state support, the economy, according to Putin, began to recover: in June-July the volume of purchases of goods and services is 3.8% higher than in February, electricity consumption returns to pre-crisis levels.

“Our main task for economic policy is to restore the level of employment, to give people the opportunity to work, to earn, to provide for their families,” Putin said, stressing that the federal budget should be used to do so.

Nevertheless, anti-crisis measures do not undo other priorities. “It is very important to direct additional resources to our long-term, strategic plans,” Putin said: these are national projects, including health and education, infrastructure construction, and the maintenance of the country’s defense capability.

The salaries of military personnel should be kept “at the level of workers of leading industries,” Putin was quoted as saying in his decree of May 7, 2012. These plans should be “not just kept in mind” but “considered in future work,” as well as the sentiment of citizens who voted for amendments to the Constitution, the president said.

The budget for the next three-year period “should be consistent with the spirit and letter of the updated Constitution, the demands of the people,” he said, adding that it is necessary to “preserve responsible fiscal policy” and “increase the sustainability of the entire system of public finances.”

According to the Ministry of Finance, in the budget 2020 there is a “hole” of 5 trillion rubles, or 22% of the expenditure part, which should grow to 23 trillion because of the economic recovery plan.

Despite the three-fold collapse of oil and gas revenues, the government continues to increase funding for the army and security agencies, which for January-June was allocated 2.5 trillion rubles, or one in four rubles spent by the state.

According to the “national defense” budget for 6 months the government spent 1.6 trillion rubles. Compared to last year, appropriations increased by 10%, or 148 billion rubles, and in nominal terms were the record for all time available data.

Funding for the state program “Development of the Defense-Industrial Complex” almost tripled – for 6 months the Ministry of Finance spent 4.5 billion rubles against 1.3 billion a year ago.

Spending under the “national security” list, including the Interior Ministry, National Guard, Federal Security Service and Federal Protective Service, increased by 11%, to 960.8 billion rubles.

(C)UNIAN 2020