TRANSCRIPT: [Medvedev on] The Government’s action plan to ensure stable socioeconomic development in 2016

(Government.ru – February 18, 2016)

Excerpts from Dmitry Medvedev’s opening remarks at the Government meeting:

The budget sector and the real sector are overstrained today due to low oil prices and sanctions, so there have been a lot of proposals to be included in the plan but far from all of them were incorporated into the final version.

We need to pursue a balanced budget policy, so the plan has been drawn up so as not to assume obligations that we will be unable to meet this year.

The economy is gradually, albeit with certain difficulties, adjusting to a new foreign economic environment. We need to provide targeted support to branches and sectors with high potential for growth: the automotive industry, the light industry, transport and agricultural machine engineering, housing construction and agriculture. They have adapted to the changes in the situation faster than others, while, as last year’s results showed, support measures ensure a good payoff.

Almost 140 billion roubles will be provided for a programme to support the automobile industry, up to 10.5 billion roubles for agricultural machine engineering and about the same amount for transport machine engineering companies.

We will continue to support agriculture and stimulate import substitution programmes in other sectors. To this end, the Industrial Development Fund will be recapitalised.

The current situation on the world oil market shows there is a pressing need for a modern economic structure and steady economic growth based not only on the export of raw materials but above all on the manufacturing and export of competitive goods.

The plan should ultimately stimulate structural changes. We provide focused support to separate sectors with additional funding and an improved business environment. These measures should be backed up by a tariff policy and financial and organisational support for industrial exports.

It is important to do our best to cushion the negative fallout from the crisis for the people, stabilise the employment situation, slow down the growth of prices to the degree possible and help all those who are in the most vulnerable position – pensioners, people with disabilities and low-income families. Despite the austerity of this year’s budget, we will fully meet our social commitments.

This year we indexed pensions. The decision on further indexation will be made based on first-quarter results.

To balance regional finances and lower the debt burden, we will continue to extend budgetary credits. This year, 310 billion roubles have been earmarked in the federal budget for this purpose.

We will help regions retain a relatively low level of unemployment with an initial disbursement of about 3 billion roubles. Over 7 billion roubles will be provided in targeted support for single-industry towns, where the employment situation is the most difficult, and, if necessary, this support can be increased.

We will resume the continuous monitoring of the financial and economic situation of system-critical companies.

As last year, we will release funding to provide medications to all those in need and rehabilitation services as part of disabled people support measures. We have begun implementing the programme of building new schools.We will continue to co-finance summer holiday and health and fitness programmes for children from troubled families.

Social support should become more targeted and more effective. Funds should get to the people who really need them.

The so-called systemic block constitutes the core of the plan – two-thirds of its provisions. These are structural measures and legislation to ensure stable economic growth, designed not only for this year but also for the medium term.

This primarily relates to the provision of favourable conditions for the development of small and medium-sized businesses and innovative companies. We will extend the tax system in the form of a unified imputed income tax until 2020. We will incentivise small companies to become more actively involved in state procurements and procurements by state-run companies: their share in direct contracts will be increased to 15 percent.

An array of measures is envisioned to cut costs, primarily with regard to infrastructure monopolies, which, by virtue of their exclusive position, often attempt to pass their costs onto consumers. A number of decisions will be made this year to ease this burden.

We will continue to subsidise regional air transport services where aviation is the only year-round type of transportation, as well as transport services related to the development of inbound tourism.

We will work to improve the investment climate and reduce the administrative burden. The plan also calls for a reform of the state control system.

Draft laws should be prepared promptly so that most of them can be passed right now, during the spring session.