Transcript of the beginning of the meeting:

Vladimir Putin: What is it that you've brought?

Igor Slyunyayev: Command and staff maps and a brief report on 2010 results.

Vladimir Putin: Alright. How are you?

Igor Slyunyayev: Good, thank you. I've been carrying out your instructions: we have drafted proposals for healthcare and housing and utilities modernisation programmes. We have established a working group to finalise the region's development strategy until 2030, with an emphasis on three areas: economic and social services modernisation, and the improvement of the management system.

Vladimir Putin: How much does the Healthcare Ministry propose that you allocate for healthcare modernisation in the region?

Igor Slyunyayev: The proposal that they confirmed is 4.5 billion roubles, including two billion from the Mandatory Medical Insurance Fund, but we would also like to ask about renovating the regional hospital, which is in terrible condition.

Vladimir Putin: You can't do that with four billion roubles?

Igor Slyunyayev: It won't be enough, Mr Putin.

Vladimir Putin: How much can you allocate from your budget for these tasks?

Igor Slyunyayev: In terms of co-financing, 20% will be covered by the regional budget.

Vladimir Putin: And what kind of facilities are there mainly?

Igor Slyunyayev: We are renovating the buildings and facilities where medical equipment is used and are completely upgrading medical equipment in all municipalities.

Vladimir Putin: How will this affect healthcare in rural areas?

Igor Slyunyayev: One of the biggest problems is shortage of personnel. We are now nearing an agreement on budgetary allocations for training medical professionals and will probably move to contract-targeted training. One problem is to train personnel, and another is to consolidate staff in rural areas. But all the rural first-aid stations in all 30 municipalities are included in this programme.

Vladimir Putin: You have had good – I would even say ambitious – housing projects, there was a project called "New Town," right? Have you set aside it completely during the crisis or what? How is it now?

Igor Slyunyayev: Mr Putin, we came out a bit behind in housing relative to 2009, having commissioned 115,000 square metres last year. This is, of course, very little, because you set the target of at least one square metre per resident of the region. But the "New Town" project – we will implement it later this year, and it involves around 2,500 residential properties in Kostroma. It's a good project, and we'll start it this year.

Vladimir Putin: In other words, it's a project that can be implemented and you haven't abandoned it.

Igor Slyunyayev: We haven't abandoned it.

Vladimir Putin: The drought affected almost 10% of areas under crops. What is being done to help affected businesses? And how are you preparing for spring sowing?

Igor Slyunyayev: The Finance Ministry offered us an agricultural loan to compensate the losses of agricultural enterprises affected by the drought in 2010. But since the regional budget is already heavily burdened with debt, I refused to take out such a loan. Preparations for spring sowing are in full swing. The cost of diesel fuel and fertilizer is cause for concern.

Vladimir Putin: We'll talk about this later. Alright, so you rejected the loan. What about the subsidies?

Igor Slyunyayev: We haven't received a single kopeck.

Vladimir Putin: Why not?

Igor Slyunyayev: I don't know.

Vladimir Putin: In other words, the region didn't receive anything at all?

Igor Slyunyayev: The region didn't receive a kopeck of subsidies for compensation of losses from the drought.

Vladimir Putin: And the drought affected 10% of the area? As far as I remember, you harvested 48% of the 2009 harvest in 2010?

Igor Slyunyayev: Absolutely correct, but we are not a grain-growing region, we grow just fodder grain, that's the problem. Moreover, a lot depends on the owner. I will say that even based on our businesses, we have grain yields of 6,000 kg per hectare, and even up to 1,200 kg. The type of agriculture is completely different.

Vladimir Putin: And have you received anything from the intervention fund?

Igor Slyunyayev: Just now, on your instructions, we have completed an inventory of the grain in the granaries and have applied for receiving grain.

Vladimir Putin: How much would you like to receive?

Igor Slyunyayev: We are asking for around 19,000 tonnes.

Vladimir Putin: Alright, but have you applied for subsidies?

Igor Slyunyayev: We have applied, of course, but the Agriculture Ministry did not approve them. They proposed a loan and we refused it because of the budget's heavy debt load.

Vladimir Putin: Alright, we'll talk about it.

Igor Slyunyayev: I would like to thank you first of all that this year was in many respects a success, and our industrial output index is higher than the Central Federal District and the Russian Federation, 115% compared to 2009. We managed to increase regional budget revenues by about 16%, which is about 5% more than the pre-crisis year 2008. The situation with social benefits payments is also good.

But now we are forced to revise the main principles without reducing the amount of social support, as per your directive: we need targeted assistance first of all, and secondly, a balanced budget. I analysed the data from 2000 to 2010, and the amount of social benefits payments has increased by 900%.

Our region went from 200 million roubles to two billion roubles. The peak of the payments was in 2006-2007 and the subsequent years. Therefore, our task is twofold: to make budget spending on social benefits more cost-efficient and rational but without cutting the benefits.

On the whole it was a successful year, Mr Putin.

Vladimir Putin: Good.