Vladimir Putin’s introductory remarks:

Good evening, colleagues. This meeting actually marks the start of a new budget cycle. We are beginning to draft the federal budget, this country’s main financial document. Next week we will convene a budget-planning commission meeting to consider a socioeconomic development forecast for 2013-2015 and the main elements of our tax and customs tariff policies. Today we will outline some general approaches to these documents. Let me remind you that these approaches should form the basis of the draft federal budget for the next three years. Each year we consider and approve the main budget parameters for the following three years and, as we have agreed, we will review a detailed projection for next year.

Before we begin, I would like to say a few words about the current state of national finances. Budgetary discipline has improved slightly this year, with 24% of the budget allocations used up in the first quarter of 2012 as opposed to 21% in 2011. This shows that government agencies are more likely to tap the funds allocated for their programmes. A slight deficit in the federal budget – 0.9% of GDP – has been recorded in the first quarter of 2012. As we said (and the Ministry of Finance has confirmed), this is the result of government agencies being more active in drawing on the funds earmarked for them. I ask everyone to pay as much attention as possible to keeping the budget balanced. I have just said the same thing to the Ministry of Finance’s Board.

The circumstances are certainly favourable for this. I said there had been a slight deficit in the first quarter, but in March the Federal Treasury’s revenues exceeded expenditures and, judging by all appearances, this trend will continue in the near future. This is the result of the generally positive situation in the Russian economy: industrial production is growing as is the trade turnover and – a particularly pleasant fact – investments in fixed assets. The national trade balance has been upgraded as well – due to, among other things, the favourable prices of our traditional export commodities.

According to the Russian Central Bank, exports exceeded imports by $61.4 billion in the first quarter of 2012. This is a decent indicator and is 27% above the same period in 2011. This means additional budget revenue that, as I said, can be used to address important social agendas and economic development projects. In this connection we will consider later today some amendments to the 2012 federal budget and discuss additional budget spending. I’m thinking in terms of approximately 108 billion roubles. Let me repeat that this is an approximate figure because we are barely past the first quarter.

About a quarter of this amount – 24.3 billion roubles – has been earmarked to buy housing for surviving WWII veterans. Another 14.7 billion roubles is scheduled to fund pay rises for the employees of the Interior Ministry and the Federal Fire Service as well as to Armed Forces personnel employed by military educational centres and military chairs at higher educational institutions. This category of service personnel seems to have been forgotten in the course of the military pay reform. This should be redressed and salary arrears must be reimbursed starting from January 1, 2012. A recalculation must be done.

I would like to dwell in particular on increases in financial support for Russian science. We will allocate an additional 2.5 billion roubles for the Russian Fundamental Research Fund and the Russian State Scientific Fund. Another 2 billion roubles is planned for the seismic upgrading of buildings and the replacement of dilapidated housing in the Republic of Tyva, the Republic of Khakassia and in Gorny Altai, all of which were hit by earthquakes in late 2011. Two billion roubles has been set aside to help the Chelyabinsk Region where residents have to be resettled from the landslide-threatened mining village of Rosa. You may know that I visited this town and saw everything with my own eyes. It is impossible and dangerous to live under these conditions. We worked out joint decisions with the regional authorities and must contribute our share: this money will be allocated to deal with the problems I’ve mentioned.

Let me remind you in conclusion that we’ve decided to increase the number of beneficiaries of the low airfare programme for the Far East. People living in that region have asked us to extend the programme to women that have reached the pension age of 55. Now they can buy low fare tickets as soon as they retire on pension. Previously the age limit was 60 for both men and women. We’ll earmark an additional 400 million roubles to launch this programme.

And now let’s get down to business.