It looks like the Finance Ministry is moving away from hitting strategic task of Vice Premier Alexei Kudrin, left, - slowing down the growth in budget spending.
Photo: Dmitry Dukhanin
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Government Spending Breaks Away
The federal budget revenues reached 4.369 trillion ruble in the first half of the year, having accounted for 54.2 percent of the annual target, the costs didn’t exceed 3.038 trillion ruble, or 41 percent of the target, the RF Finance Ministry reported. In nominal value, the budget receipts grew a third on year and the spending surged 40 percent. Although the Finance Ministry managed to comply with the even-spending schedule in June, the budget overhang exceeded 700 billion ruble after six months of this year.
The tricky point is that the recently released figures on the budget execution have gone out of date already. Past week, the State Duma passed in the third final reading a bill changing the basic budget parameters for 2008 through 2010. This law is yet to take effect and, therefore, was ignored by the Finance Ministry.
Under that bill initiated by the government, the revenues of 2008 budget stepped up by 908.8 billion ruble to 8.966 trillion ruble and the costs widened by 120.4 billion ruble to 7.530 trillion ruble.
Given the recent changes, the revenue portion of the budget was executed just by 48.7 percent in January through June. But this achievement is very relative. Due to the shift to the quarterly payment of VAT, the tax collected in April to June will be forwarded to the budget only July 21. So, the material adjustment is imminent – the difference between April and May receipts (less VAT) secured by the tax service was 440 billion ruble.
The bill will trigger no drastic changes in the cash execution of budget costs. With regard to all amendments, the extent of the annual target attainment sinks from 41 percent to 40.3 percent.
As to another strategic target of Vice Premier Alexei Kudrin – the slowdown of government’s spending, the Finance Ministry is apparently moving away from it. In nominal value, the cash spending surged 40 percent on year in the first half-year of 2008 vs. the growth of just 16 percent posted in January through June of 2007.
www.kommersant.com
All the Article in Russian as of July 11, 2008
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