The transcript of the beginning of the meeting:

Vladimir Putin: Let's begin with the most pressing issues. Ms Golikova, concerning the main areas of implementing the anti-smoking concept that we have approved: How many smokers are there in Russia? Over 40 million, right? Please.

Tatyana Golikova: Mr Putin, dear colleagues, last week you signed the concept for state policy on combatting tobacco use. I would like to remind my colleagues that this concept was adopted in response to the Russian Federation's accession to the International Anti-Tobacco Convention.

We have already prepared the Russian Federation's first report on the implementation of this convention.

At the same time, in 2009, the Federal State Statistics Service and the Institute of Pulmonology conducted a study using the World Health Organisation's methodology for the first time to assess the state of smoking in Russia.

Smoking accounts for 17% of all deaths in our country. Every year 400,000 Russians die from diseases caused by smoking. The total number of smokers in Russia is 43.9 million, which is 39.1% of the country's population.

Vladimir Putin: This is a very large number.

Tatyana Golikova: Yes, it is. In addition, 80% of our citizens are exposed daily to second-hand smoke - everyone who is surrounded by smokers.

Vladimir Putin: Which members of the government smoke? One, two, three ... It seems like we have better figures here than in the country overall, at least with this issue.

Tatyana Golikova: About 60.7% of men are smokers...

Vladimir Putin: Wait a second. They will probably make the commitment to quit, right?

Remark: According to the concept...

Vladimir Putin: How are you going to combat it? You should lead by personal example! And what are you laughing at? You are a smoker too and you also need to quit. Please.

Tatyana Golikova: An average Russian smokes 17 cigarettes per day. Men smoke 18 cigarettes and women 13 cigarettes per day. And the average monthly amount spent on cigarettes in Russia is 570 roubles, based on the data from 2009.

The study shows that Russians will spend 24.6 roubles on average for a pack (20 cigarettes), which is compared to the cost of rye bread in the study - 26 roubles.

Therefore, the study concludes that a consistent policy of increasing the excise tax on tobacco is needed. This has been partially included in the draft budget that was recently submitted to the State Duma.

In 2009, the amount of money spent on commercially produced cigarettes accounted for 0.9% of GDP. Amazingly, the study shows (and this is unique for Russia) that 41.3% of individuals with higher education are smokers, whereas the rate of smokers among individuals with only secondary education and primary education is 38.1% and 18%, respectively. This means that the percentage of smokers is significantly higher among the more educated.

What does the convention that we have ratified provide for, and what does the concept that you have signed provide for? In accordance with this concept, we have a plan of activities that provides for combined effort of various departments. The reports that we are required to submit, the progress reports as stipulated by the convention, will certainly require the involvement of every department. Therefore, we would like to ask you to emphasise in your instructions that this document is not just intended for our ministry, but for the government of the Russian Federation as a whole and for every agency that is in one way or another involved in these activities.

What can we expect from this ratification? Restrictions on smoking in public places, gradually introducing, as I said, higher excise tax (but there needs to be a smooth transition, the country can establish its own rates), a gradual ban on advertising, sponsorship and promotion of tobacco sales and the enforcement of the ban on the sale of tobacco products to minors and by minors.

If the concept that you have signed is implemented, the long-term decrease in the smoking rate in Russia will be 10% to 15% if compared to what we have today. According to a study conducted by the World Health Organisation, Russia is the world's leader in consuming tobacco. We assumed that this would have been Mexico or Egypt, but in this study Mexico and Egypt are on lower, that is, better positions in this study. We follow directly after Turkey.

Vladimir Putin: Really, nothing to be happy about. But this means only that we should go on with our anti-smoking campaign and do it actively.

Tatyana Golikova: Next year's draft budget, which we have coordinated with Mr Kudrin, earmarks a billion roubles on the promotion of healthy life-styles. You remember that when we were starting it, we placed the focus on alcohol abuse and smoking. Now we are extending the programme to drug and glue addiction and continue the efforts that began as part of disease prevention to open 193 health centres for children and teenagers this year. Next year we plan to do even more in this sphere than we did during these two years, I mean disease prevention.

Vladimir Putin: Good. Now, could you say a few words please about the programme of state guarantees of free healthсare.

Tatyana Golikova: Before I go over to the future programme, I'd like to say that the recent decision you made while visiting high-tech centres in St Petersburg envisages enhancing high-tech medical aid to the population this year. We have estimated the increase that will be possible this year. Let me remind you that the target index of this year's national project envisages 274,000 high-tech surgeries. The added billion roubles will finance further 7,500 such operations both in federal and regional high-tech hospitals.

As for the programme of state guarantees to be adopted for next year, I would like to stress that it is an annual document adopted under the authority of the government to provide free public healthcare. The programme sets all per capita norms connected with the implementation of the basic programme for mandatory health insurance and the broader regional programmes implemented by the regions themselves within their rights.

Next year will be special: it will be the first, transitional year in implementing healthcare modernisation programmes by the regions.

Two percent will go to material and technical supplies and the introduction of information technology in the next two years. However, even next year we will be able to improve the balance of the state guarantee programme by 10% against this year. After the healthcare modernisation programmes are coordinated (and their coordination will last all through the fourth quarter), it would be the ideal option to finish coordination by December so as to endorse them, and allow regions to start the fiscal year on January 1 with approved programmes.

The regions began presenting their first draft programmes on October 1 and, accordingly, we have established a relevant group at the Ministry of Healthcare per your directive. You have issued instructions for a government-level interdepartmental working group to be set up and led by Mr Alexander Zhukov. After the ministry evaluates the programmes as a routine matter, he will endorse them here at the government level.

If the programmes demand more adjustments of the programme of state guarantees, we will make necessary corrections in the proposals made now in the decree on endorsing state guarantees for 2011.

Mr Prime Minister, I think some time this month we will be able to take a region as a practical example to show you that draft programmes of modernising healthcare are already working.

Vladimir Putin: Yes, let's do that. We have some time yet to evaluate the projects and make necessary adjustments and additional agreements with our colleagues in other regions, as well. Thank you.

Tatyana Golikova: Thank you.

Vladimir Putin: Mr Kirienko, you have information about the performance of the nuclear energy industry these last nine months. Go ahead, please.

Sergei Kirienko (CEO of State Atomic Energy Corporation Rosatom): Mr Prime Minister, dear colleagues, I will begin with summarising the last nine months. The nuclear energy industry has hit the target posed it by the united energy balance. We were uneasy about the summer. Extreme weather conditions in July and even worse in August necessitated widespread transmission line disconnections due to wildfires, wind and unprecedented weather. The number of air transmission line cut-offs grew practically threefold: 36 times in the first nine months of this year against 16 times in 2009. So strong was the impact of the weather anomaly on nuclear plants.

Nevertheless, our safety record has been better than average in these past five years despite all the difficulties. Even in these conditions we have met with excess targets set by the Federal Tariff Service for energy production: 123.3 billion kilowatt/hours, exceeding the plan target by more than 500 million.

Mr Prime Minister, I would like to report the following: when you opened the new nuclear power unit in the Rostov Region on March 18, we told you that the transition from the power unit start-up to commissioning for full industrial operation via test exploitation will take six to nine months. We have done the job even quicker. Documents will be completed by October 16, and Unit 2 of the Rostov plant will be fully commissioned to steadily provide energy to this part of southern Russia.

More than that, in compliance with the programme approved by the government for increasing the natural uranium reserves, we have finished the work jointly with the Ministry of Natural Resources on increasing Russian uranium reserves. Particularly, the acquisition of the Canadian company Uranium One allows a major increase. This is especially important because the matter concerns the most effective low-cost reserves. As for the most profitable reserves, we have practically doubled reserves and mining. The nine months of 2010 saw natural uranium output grow by 13% against last year.

Next, our transnational contracts. Our target is the greatest possible enhancement of our share in the world markets during the nuclear industrial renaissance, mainly in the nuclear fuel cycle. Our contracts for fuel supplies and enrichment will reach $20 billion by the end of the year. This is the actual total of such contracts. Our first-ever breakthrough to the US market this year is also of principled importance. Above the main contract, we have concluded $3 billion worth of contracts in the American market to override the anti-dumping amendment over which we had fought for two years. We think we will get our contracts in the US market to reach the $4 billion mark by the end of the year.

There are also new markets where we were absent or had only a token presence. We have signed a long-term contract from 2011 through 2025 with a Swiss company to supply enriched uranium. We have also signed a ten year fuel supply contract with a South African company. The Mexican contract is coming into effect. We have not supplied anything to Mexico previously but now we will fully satisfy the demand of its only nuclear plant for enriched uranium. The contract has been signed already.

Mr Putin, I would like to report about the order you have given concerning the Committee for Economic Cooperation with Ukraine. Its cabinet has just approved the outcome of the tender at which we had a close race with America's Westinghouse, which had ousted us from all of Russia's long-established markets in Eastern Europe. The preceding years have brought us East European markets back. The latest decision concerned the Czech Republic, which has loaded Westinghouse fuel ahead of schedule to conclude a long-term contract with Russia.

We have only Ukraine left because former decisions concerning it were made not in open auctions and competition but were based on political factors. Open competition has been granted now. The tender lasted three months, and Russia's TVEL won because it offered better terms than Westinghouse. Considering all this, the Ukrainian Cabinet of Ministers has endorsed the decision. This means that our long-term contract for fuel supplies to the Ukrainian market will come into effect. It is highly important that the contract will last not ten years as the preceding one but until the expiry of the existing Ukrainian power units' service life. Some will serve for another 20 to 25 years, and some for 30 or even 35, and they will receive Russian fuel all through that time. As we have arranged, we will build in Ukraine a plant for the final stage of fuel manufacture. It will be a joint venture on a fifty-fifty basis with Ukraine. However, the contract envisages pressing obligations of all uranium enrichment services to be granted by Russian companies.

Thus, the first stage of strengthening our market positions on mutually beneficial terms is the initial stage of integration with Ukraine in the nuclear industry. You have approved this integration. Thank you.

Vladimir Putin: It is important because it strengthens our position on the East European market as a whole.

Sergei Kirienko: It certainly does. You know, it is the revival of the principle that the best and safest fuel for pressurised water reactors comes from Russia on competitive market terms. It has nothing to do with political pressure or some agreements. It concerns only market competitiveness.

Vladimir Putin: Good. Mr Basargin (Minister of Regional Development Viktor Basargin), the International Arctic Economic Forum has finished in Murmansk. What was there of interest?

Viktor Basargin: The 2nd International Arctic Economic Forum took place in Murmansk from October 1 to October 3. It focussed on the use of mineral resources and the development of the energy sector in the Arctic zone.

Of high importance to us was our presentation of the Arctic development strategy at the forum. It aroused tremendous interest, and many proposals were made. The forum gathered more than a thousand participants, some of them from abroad -- Denmark, Norway and Finland.

More than 20 agreements were signed during the forum to a total exceeding 1.5 billion roubles. Proposals within the strategy framework were discussed actively. The Marine Board met in the forum framework, and another project was launched for an air landing on the Arctic ice. So the forum really deserved the interest it aroused.

We are finalising various details of the Arctic strategy with consideration for forum proposals, and we will submit it to the government for consideration in two weeks.

Vladimir Putin: Good, thank you. Now, I would like to say a few words regarding our agenda today.

The government submitted the draft budget for 2011 to the State Duma last week. However, this year is not over yet. I have just discussed the issue with Mr Kudrin. According to estimations of the Ministry of Finance, the budget will receive 91 billion roubles in extra revenues in the remaining months of this year.

Apart from this, some government agencies have managed to save funds, which were already allocated in some areas, such as debt management, and also through optimising work in general. In connection with this, I would ask you to draft a number of amendments to the 2010 budget in order to resolve some urgent issues, without waiting until January. In particular, the amendments envisage extra 25 billion roubles to be given to the fund promoting the housing and public utilities reform. The money will allow major progress toward its principal goal, to remove tenants from dilapidating houses, and help to cope with full repair of housing.

The reputation of the fund is not bad, even good, I should say. It is efficient, and the results of its work are evident. Naturally, we cannot consider the demolition of hazardous and dilapidating houses to be finished. We have also launched new programmes: I mean improvements in Norilsk, the area along the Baikal-Amur Railway and Far Eastern towns and villages. In a word, we are addressing the problem comprehensively across the country.

Next, we will allocate 40 billion roubles for the implementation of Russian Railways investment projects. We have imposed considerable limitations on fare increases, including railway cargo tariffs, to promote the national economy. Tariffs have grown by less than 10% this year, so Russian Railways are eligible for state assistance in infrastructure development and reconstruction, and in the construction of new projects.

We have earmarked 13.7 billion roubles for the completion of construction of regional high-tech health centres. We have seen that the work is being done, and quite successfully. I have seen some excellent examples in places I visited. However, we should closely monitor construction works, costs, deadlines and compliance with technical requirements.

Close on 11 billion roubles will be allocated to the establishment of the infrastructure in special economic zones, including the new zone in Togliatti.

Last but not least, a proposal has been made to allocate around two billion roubles for financial incentives to the military and people of equal status who took part in fighting forest fires last summer. They worked with dedication and self-sacrifice, as you know. I think they deserve bonuses.

The next item concerns the establishment of a cutting-edge monitoring and supervision system and the removal of outdated and redundant administrative barriers. Some of my colleagues and I have just visited a financial and economic forum organised by VTB, one of our leading banks. The participants mentioned these notorious barriers practically in every address.

I remind you that the government has already submitted a new version of the licensing law and amendments removing a number of barriers in the construction industry and education.

We regard these laws as priorities and we ask the State Duma to make relevant decisions soon.

We will also analyse amendments to the law on technical regulation today as they form the legal basis for the establishment of a national accreditation agency.

To put it plainly, the government and market participants bear many grudges against the performance of the acting departmental systems of technical control. Above all, the authenticity of safety certificates they issue arouses major doubts.

The national accreditation agency is called upon to resolve the matter. In the future, it alone will appoint laboratories and experts issuing safety certificates. Accordingly, they will carry full responsibility for the quality and results of their work.

At the same time, it is necessary to enhance fines and other penalties for violations of safety requirements, for instance, for appearing in the market with commodities that have not passed checks stipulated by the law, for non-compliance with technical regulations and other actions that endanger people's health. The relevant draft law is also on today's agenda.

I want to mention another decision we should make. That is granting state guarantees on loans to implement investment projects in the Chechen Republic. They concern processing industry - particularly plants in Grozny, the implementation of broadband wireless networks, development of plant and livestock breeding, and the establishment of an agricultural holding. All told, 3.8 billion roubles have been earmarked as related guarantees. Today is the birthday of Ramzan Kadyrov, the republic's president, but these generous guarantees are just a coincidence, although a happy one for the republic.

Evidently, not only Chechnya, but the entire North Caucasus region needs special support to step up investment processes gradually, create new jobs and form a strong economy. Strictly speaking, what I have mentioned now is stipulated in the development strategy of the North Caucasus, which we have endorsed. Let us get down to business.