Vladimir Putin's opening remarks:

Ladies and gentlemen,

Today we will continue our work on the federal budget for the period from 2012 through 2014. We will discuss federal targeted programmes and major facilities and construction projects not included in such programmes.

I would like to point out that we have increased the amount set aside for federal targeted programmes to 923 billion roubles this year.

Research, introducing innovations and developing high technology will remain our top priority.

For example, we have already invested heavily in the development of nanotechnology infrastructure and in the global navigation system. I would like to highlight that the GLONASS constellation will receive the projected number of satellites by the end of the year.

Government resources should continue to be focused on breakthrough areas that provide a multiplication effect. They should facilitate systemic, qualitative changes and create a foundation for the continued development of the country's economy.

Naturally, supporting education is one of our top priorities.

This year we launched a major federal programme to develop education in

2011- 2015. Its aim is to make up-to-date, quality education more accessible at all levels. Funds set aside for this programme must be used efficiently, which also means that the full amount that is needed should be set aside.

As we prepare this three-year budget we need to look very carefully into providing additional funding for existing federal programmes. Above all we should make budget spending significantly more efficient and make sure that public funds are used carefully.

We recently reviewed the performance of the federal targeted investment programme in 2010. As you remember, we discovered that the allocated funds were almost completely used up – more than 98% – while only 68% of the planned facilities were commissioned.

We need to work in close cooperation with regional and local authorities. It is not enough to make sure that the money reaches the contractors. We need to monitor how regional authorities invest the money. These processes should go on simultaneously until the final result is achieved. Missed commissioning deadlines and constantly increasing work costs are unacceptable.

Here is my final point. The macroeconomic dynamics are currently quite favourable, as we are aware. But we have to understand that the federal budget will remain in the red in the immediate future and that we cannot deviate from our strict budget policy and effort to curb the growth in spending.

Therefore I ask all of you to demonstrate the utmost responsibility when preparing budget amendments introducing new, additional programmes and projects. We need to be very careful about this and to be sure that these projects are necessary and within our actual capabilities.