Vladimir Putin's opening address:

Good afrernoon,

Today we will continue working on our most important financial document: the financial law of the land for 2011. We will discuss the major components of the 2011 federal budget and amendments to the current, 2010 budget.

What factors should we take into consideration during today's discussion?

As we all know, economic growth is currently higher than we planned for several months ago. According to the Ministry of Economic Development, this year GDP will grow by 3.5% to 4.5%, or even more.

Other key macroeconomic indicators are also doing well. For example, owing to low inflation, the Central Bank again reduced the refinancing rate two days ago, this time to 7.75%. This is a historic low for Russia. Without a doubt, this step will increase opportunities for lending in the real economy. And overall we can say that all the necessary prerequisites for a faster economic recovery are gradually taking shape.

We are also happy about our key exports to foreign, global markets - metals and chemical products, as well as oil and petroleum products. The 2010 budget was based on a price of $58 per barrel of oil, whereas the actual average price has been more than $70 per barrel since the beginning of this year.

This will provide us with additional revenues. Here additional is a relative term, of course: we still have a budget deficit.

Nevertheless, we will be in a better position to address major financial problems. First, we must reduce the budget deficit and make it less than in the past year. In 2009 it accounted for 5.9% of GDP. Accordingly, we can use less of the Reserve Fund, and perhaps maintain it partially.

Second, on April 1 we indexed pensions by 6.3%, as we promised, and we must provide funds for this decision. Preliminary estimates indicate this will cost about 129 billion roubles.

Another 13 billion roubles will be channelled to finance federal and regional increments to pensions.

In addition, we are planning to allocate 92 billion roubles to provide housing for the veterans of the Great Patriotic War who registered after March 1, 2005, as well as for citizens previously dismissed from military service and sent to register on the municipal housing waiting list, which is famously slow.

We are also planning to allocate 7.8 billion roubles to develop a comprehensive system of transport security. We will also fund a series of investment expenses.

Now I'd like to say a few words about our main approaches to the budget for the next three years. Let me say again that we have announced our intention to return to a balanced budget, and we need to base our decisions on this intention.

Our partners, private companies and investors are focused on the target indicators that we have set for ourselves. And of course, everything we are planning and have announced publicly must be fulfilled.

I'd like to hear specific proposals today from the Finance Ministry regarding the programme for reducing the budget deficit.

And, finally, I'd like to draw your attention to the changes in the procedure of discussing budget bills.

Recently, the government submitted a proposal to the State Duma to review the budget at a later date - on October 1 of the current year. We promised the deputies that the inevitable reduction of the time allocated for the discussion of the country's fundamental financial document, both in the Duma and the Federation Council, will be compensated for by extremely close cooperation during the so-called zero reading.

I'd like you to consider this and plan your work with the deputies of the State Duma and the Federation Council accordingly.

Let's get down to the discussion.