Vladimir Putin: Good afternoon,

As we have agreed, we will continue a series of consultations with different parliamentary parties. This is a good opportunity to exchange opinions on a broad range of legal issues. First of all, I would like to thank the deputies from A Just Russia for their support of the Russian President, and the executive authorities during the tragic events in the Caucasus. I would like to emphasise that the unity of the political forces with different views on domestic political problems makes it possible to uphold the interests of Russia and its citizens by concerted effort.

A Just Russia is paying much attention to social issues; the housing problem is one of them. I would like to say a few words about that. You know we are planning to considerably expand housing construction, and bring it up to 100 million square metres per year or even more. Last year, 61 million square metres were commissioned, which was an increase of 21%. This year has also seen a growth in this figure; it is about 5.2%.

Needless to say, the recent developments in the world financial market are bound to affect the housing sector. Thus, many banks have already announced their decision to increase mortgage interest rates. At the same time, you know what decisions the Government has made in this respect to help the Agency for Home Mortgage Lending. We have decided to channel an additional 60 billion roubles into its charter capital.

I am convinced that current problems should not distract us from reaching our strategic goal of launching the construction of modern and comfortable housing. We have already decided to establish a Fund of Assistance for Housing Construction, which will start in the next few months.

Russia has another truly vital problem, which is closely linked with housing construction. I mean demography, the need to strengthen the family and increase the birth rate. In the last two years, we have seen quite good progress in this area. In 2007, the number of births surpassed 1.6 million. This is a substantial increase. This year, the birth rate has gone up by 8.3%, which is generally good.

This is partly the result of the special measures adopted in the last few years - the introduction of the childbearing certificate and of maternity capital, and an increase in subsidies to families with children. Deputies from A Just Russia have contributed to the adoption of these programmes, among others.

I would like to thank all those who took part in this. Despite sceptical views in the beginning, positive results have been achieved.

Now we are facing new tasks. It is necessary to develop children's healthcare and pre-school education. The birth rate has gone up, and we do not have enough kindergartens. We should introduce new, higher standards for the production of food, and consider methods for protecting the younger generation from smoking, alcoholism, and drug addiction.

Yelena Mizulina, A Just Russia representative in the Duma, heads the profile Committee on Family, Women and Children. It would be good if it can do more to resolve many of the said problems. Naturally, it should cooperate with the relevant departments, the Ministry of Health and Social Development, and other social agencies to this end. It is important to promote initiatives which are not simply limited to budget allocations, but which also introduce new principles of social work and motivate people to lead a healthy lifestyle. I am sure that such ideas exist, and I am ready to discuss them today.

In conclusion, I would like to say a few words about our work on the budget. Last week, on September 19, the Duma adopted the draft budget for 2009-2011 in the first reading. The deputies of your party did not support it. You have set forth your position and your comments on the budget. I am ready to discuss them today in more detail.

I would like to emphasise once again that the Government is ready to continue its constructive dialogue on the draft budget with all deputies of the State Duma. I hope we will try to bring our positions closer together.

Many thanks for your attention. Now it is your turn to speak. Please, Mr Levichev, the floor (addressing Nikolai Levichev).

Nikolai Levichev: Mr Putin, first of all, let me thank you for fulfilling your May promise to meet our deputies that supported your appointment to the prime minister's position. This is yet another opportunity to see that you keep your word both on big and small issues.

Using this opportunity, I would like to introduce my colleagues, not so much personally, but as an integral political force, which have been presented as a social-democratic parliamentary group for the first time in Russian history.

Out of 38 deputies, 20 are budding MPs, but almost half, that is, 18 of my colleagues have amassed law-making experience in the Dumas of the previous convocations. Two of them, Oksana Dmitriyeva and Anatoly Greshnevikov, have become deputies for the fifth consecutive time.

During their stay in the Duma, my colleagues have introduced a total of 777 bills, out of which 70 have become law. Thus, the creative energy of the opposition's deputy corps matches the efficiency of a steam engine.

We believe that it is the egoism of the majority, as you put it, which largely prevents our law-making machine from becoming more powerful. It is no secret that a few, or at best, a few dozen out of hundreds of deputies are capable of translating urgent socio-political and socio-economic problems into the language of a legal document. It is all the more vexatious to see their drafts being first discussed indefinitely, then rejected with vague arguments, and eventually introduced again, almost word for word, but under a different name, or brand, to use the current catchword.

This was the lot of a package of bills on tax reform for the funding of innovation. The same happened with a proposal on the inflation-adjusted funeral allowance, and some other bills. Two weeks ago, an amendment to the Law On Veterans was rejected. It provided for the granting of free cars to people with disabilities, and for free transportation between cities for war veterans and the bearers of the Resident of Besieged Leningrad badge. Sergei Mironov and Oksana Dmitriyeva made this proposal. We are sincerely hoping that before long this bill will be submitted by the Government or the parliamentary majority.

Mr Putin, at the investment forum in Sochi you spoke about the need to create new incentives for economic growth. By and large, these incentives boil down to higher motivation and higher mobility of the workforce.

National development cannot be guaranteed by the elite alone and exclusive reliance on major metropolises. Regrettably, national innovation-based development programmes are not yet integrated into social policy, which is still largely seen as charity or irretrievable handouts. It is not considered to be conducive to innovation-based development. We think that social expenditures should be strongly connected with innovative goals.

We are ready to switch to new information and communications systems, a mobile telephone network and digital television technologically, but we are not ready socially. Society is not yet ready for this.

In the near future, digital or information inequality may become one of the main reasons behind an even bigger social gap. This is a global problem, but, as it always happens, here it has its own features. Transport problems are impeding the population's mobility because of Russian distances. An ineffective anti-monopoly policy is making them worse. As we know, in summer it is 2.5 times more expensive to fly to Vladivostok than to New York.

I would like to emphasise that transport in this context is not only an engineering and economic problem. Lack of efficient transport creates a real threat and promotes the country's disintegration. In this sense, development of information technologies could partially make up for low geographic mobility. But here managerial decisions are still driven by the inertia of old social technologies. This applies, for instance, to ill-considered merges of higher educational establishments, and elimination of low-attendance schools, which leads to a change in lifestyle and triggers difficult-to-predict remote social consequences. And this is happening despite the availability of modern information resources, and the potential for valid remote education, including the Internet. Why do we not reimburse teachers for using the Internet, as part of their support package?

We have long advocated remote education in the army. There exist electronic educational programmes for different profiles, scales, and levels, from three hours to a thousand hours. This would make service in the army more appealing, and enhance the intellectual potential not only of the army but also the rest of the nation.

In turn, technical and information re-equipment of the army and the military-industrial complex may again drive the country's scientific progress.

We badly need to develop our armed forces' intellectual potential, but we do not really care for it. I learned the other day that having matriculated into the General Staff Academy, the commander of a nuclear-powered submarine is supposed to live with his family in Moscow on 14,000 roubles.

Lack of a government programme for the construction of social housing continues to impede the population's mobility. We spoke about this when we voted for your appointment on May 7. The regions which are short of manpower are unable to ensure normal labour migration.

Summing up all these facts, I would express our main concern about the draft three-year budget in the following way: it is flawed primarily because it does not break new ground. It simply extrapolates the trends which contributed to the country's lack of progress in the last eight years. It has preserved the already established proportions and does not stop the deepening social inequality.

Today, the nation is facing new tasks. We believe that out of 55 federal targeted programmes only two are designed to promote innovation-based development in major areas - the Programme to Develop a Nuclear Power Generation Complex through 2015, and the Targeted Programme to Develop Russian Spaceports. But even the reliance of these programmes on innovations is dubious, because they are designed to prolong the life of the existing facilities, and presumably do not envisage a switch to new solutions.

We think that today it is time to make a huge investment in intellectual labour, thereby creating incentives for its invigoration. Increases in public-sector wages are rubber-stamped here.

Entire industries working for innovation continue to be on a starvation diet. We have already lost a whole generation and may be unable to close the gap. Here is one example. When the draft budget was discussed at the meeting of the Duma Committee on Science and Science-Intensive Technologies, the Finance Ministry was represented by the deputy head of the department of budget policy in social sphere and science, Nina Ivanovna. The vice president of the Russian Academy of Sciences, who was invited to the meeting, recalled that the share of expenses on science expressed as a ratio to GDP is much less here than in the industrialised Western countries. Nina Ivanovna replied that when our economy becomes as advanced as the West, we will also fund science like they do. This remark caused a slightly bitter laugh.

Speaking about the Concept of National Socio-Economic Development until 2020, you said that the bets are placed on private initiative and freedom of enterprise. This is a natural slogan for the leader of a liberal party, but having joined the global family of social democracy, our party, A Just Russia, cannot but uphold its main motto: The freedom of the individual is achieved through collective reforms. But these reforms impinge on the rights of certain groups, first of all, those who possess wealth and power, in the interests of the majority of individuals that are deprived of them.

Freedom and justice depend on each other, and for this reason justice should be put above freedom when certain groups want to strengthen their positions. Our deputies will certainly take part in the work on the draft budget for the second and third readings. If you let me, I will merely mention a number of proposals, which we discussed with Alexei Kudrin. We think the decision on these proposals will not be made without your participation.

First, this is a request to allocate more money to the Federal Targeted Programme of State Support for the Development of Municipal Entities. We suggest an increase by 95 billion roubles. Also, we propose that 500 million rubles from this sum should be spent on the Federal Targeted Programme to Develop Municipal Energy Industry in Regions until 2015.

Second, the federal budget for 2009-2011 should provide the funds sufficient for annual inflation-adjustment of public-sector wages by 26%.

Third, we suggest funding a number of projects drafted by our party with a view to making a technological breakthrough.

Fourth, we propose increasing spending on the metro's construction with a view to commissioning many more new stations.

Fifth, in the social sphere, we suggest that more funds should be spent from the federal budget on the regions, notably, on the payment of allowances for orphans and children who have been deprived of parental care, or who live in the families of guardians, or adoptive parents. We believe that the budget should earmark more money to discount railway tickets for travel between cities for university and school students, and allocate 57 billion roubles for childcare allowances, which should be paid during two years instead of 18 months.

In addition, we continue to insist on measures, which would increase the income replacement value of the pension to 39% in 2009 and to 40% in 2010.

Thank you for your attention.

Vladimir Putin: Thank you, Mr Levichev. I am not sure I can instantly respond to all of your questions. You have raised very many problems. Let me listen to the next speaker, and I will then answer you both.

Alexander Babakov: Mr Putin, please allow me to congratulate you, and on your behalf, all national leaders with the successful counter measures to the recent aggression. It was an aggression in the broadest sense of the word. It was an armed aggression which was repelled in a short time, and it was also an information aggression unleashed by the mass media, which had no precedent since Cold War times. Needless to say, many tasks lie ahead in this sphere, and MPs have a big role to play in this context.

The State Duma could help the Government considerably here because it is represented in numerous international organisations. We have just met the leaders of the Parliamentary Assembly of the Council of Europe (PACE) that visited Russia, and have now gone to Georgia. Naturally, the contribution of the MPs is priceless in this context.

We do not want to replace the Foreign Ministry, but the deputies are indisputably responsible to the nation for bringing the truth home. Needless to say, we are doing our best. Recently, Duma deputies met an international delegation of their Western counterparts. For the umpteenth time now we tried to explain to the numerous foreign media what events had taken place in South Ossetia. Our colleague Oleg Shein recently visited Stockholm and can comment on the related discussion.

Moreover, MPs can substantially influence the adoption of the budget, particularly its defence items. I am sure that all deputies from our party will insist on increasing spending on the army's re-equipment with new weapons and means of communication to boost our defence capability.

As a party and a parliamentary group, we understand that the consolidation of society in the last few years has been linked not only with large-scale economic and social projects, but also with the markedly aggressive policy of many foreign countries. Therefore, while not repudiating our authorship, I would like to avoid partisanship and put forth proposals to promote the consolidation of society and those forces which are involved in this task.

First, we should counter the threat of criminalisation, which is linked with the permanent increase in the number of people with previous convictions or prison terms. From 1992 to 2007, 15 million were convicted, out of which 5 million were sentenced to prison terms. It is clear that an annual increase in the number of convicts by 300,000 is not conducive to building a healthy society.

We have drafted proposals to change the Criminal Code and Criminal Procedure Code. We deem it necessary to alleviate punishment for crimes which are not considered grave. Clearly, this does not apply to such crimes as murder, terrorism, bribe-taking, or paedophilia. We suggest a package of proposals which would humanise the efforts to combat crime.

What do we mean? First, a number of insignificant offenses should be decriminalised and listed as administrative violations. Second, those who have not committed serious crimes should be freed without a trial and put under collective or personal bail. Finally, it is necessary to draft and adopt a federal law on social adaptation to help discharged prisoners find jobs and housing, and return to a normal life.

I fully agree with your views on demography. Together with the Committee on the Family, Women and Children, our colleague Yelena Mizulina drafted a number of initiatives to help families with many children, first of all, those families where the third or fourth child is born. The maternity capital should be paid on the birth of a third child and so on.

The next question is about the national trust. Russia has a considerable potential in natural and cultural legacies, which is represented by more than 120,000 monuments of history and culture, and numerous reserves. Statistic show that every year this country is losing or parting with one, two, and sometimes three objects of culture and history. Therefore, we suggest a package of initiatives to introduce a national trust for cultural and natural heritage. If this bill is passed, Russia would be able to establish a system of private-public partnership, which would allow it to preserve historical legacy for generations to come.

Trust means that some historical and cultural monuments will be transferred to the ownership of investors, or given to them as property with certain encumbrances. This means that they will have not only to maintain these monuments in proper shape but also to preserve their social status to enable people to continue using them. The Government will verify compliance with these encumbrances.

The recent events in South Ossetia prompted some ideas which are worth discussing. Maybe, it makes sense to set up a CIS tribunal to punish leaders like Saakashvili. There is one more idea. Maybe, we should initiate the adoption by the Duma of a resolution recognising the genocide of the Ossetian people by Georgia, and appealing to other parliaments to support this. There are such precedents in history. Having done this, the Armenians and the Jews defended themselves and attracted maximum attention from the world to genocide.

Thank you.

Vladimir Putin: Many thanks.

As for monuments of culture and antiquity, they are a big problem in the relations between federal authorities, municipalities, and the regions. I support the proposals of the regions and municipal authorities. Given proper control on behalf of the government bodies, these monuments can and should find new owners. Otherwise, we will continue watching them fall into pieces.

You should know that we have decided to keep the budget the same. In the last few years, much money was spent on the repair of the Bolshoi and Mariinsky theatres. Initially, this funding was supposed to be reduced, but we decided to preserve it. Starting in 2009, we will finance many cultural monuments, primarily, those on a special list, and not only in Moscow and St Petersburg but also in the rest of Russia.

As for humanising our criminal law, in general I share your position. We should take a closer look at your proposals.

Now I would like to comment on what Mr Levichev said. Plagiarism, like some other activities, is one of the oldest trades in the world. But even if some ideas are stolen, although I do not have evidence on this score, the authors of these bills should be happy to see their ideas translated into reality. This means that most deputies support them, and this is good. However, it is important to see to it that bills are presented by the authors. I agree with this.

I also completely share your opinion that social policy should be driven by innovation rather than be a charity. You have recalled my statement during the debates in Sochi with good reason. This is exactly what I think. This is a complicated task but we should work at it.

Now I would like to say a few words about some specific issues that you have touched. They have been discussed for a long time. Some of the ideas which you have voiced are already being implemented. It goes without saying that schools should not be integrated everywhere. It is clear that it is better to maintain a school in those places which have nothing else. In this case, the introduction of information technologies is bound to play a positive role.

However, I have studied the experience of some regions and can tell you that if we guarantee safe and comfortable transfer of children into larger educational centres, we will upgrade the quality of education. This is certainly so, and probably only in this case can we ensure equal access to high-end education, and enable children from the provinces to study in the country's best colleges and universities. Regrettably, this is the reality of our life, and we should take it into account.

Training of teachers is another component of this process. It is easier to train highly qualified teachers for bigger educational centres and to create the necessary conditions for their work.

But let me repeat that this should not be done everywhere. Ours is a big country. I do agree with Mr Levichev that we have places where ungraded educational establishments, ungraded schools should be preserved despite the high costs, although we all understand, and I think all of your deputies know that an ungraded school costs the state several times more than an enlarged educational centre. Not only does it cost more, its educational services are worse. Regrettably, this is so, but let me repeat again that despite all this, some of them should be supported.

I am very impressed by your idea about introducing new educational and other technologies into the Armed Forces. It goes without saying that their future depends on this. I will refrain from further comments because one can speak on this subject for a very long time.

As for incomes of the military, I am sure you know that I voiced this idea about a year ago and gave relevant instructions to the Defence Minister. The proposals have been drafted. We will start with the units which bear the biggest burden in ensuring national security, and will extend this practice to the rest of the military. We are counting on a considerable increase in the incomes in the Armed Forces.

Now I would like to comment on the old and the new approaches to the budget. I will put it straight: probably the new budget is similar to the old one to some extent. But it would be an exaggeration to say that the new budget is wholly based on the old approach. This is not very objective, and I cannot agree with Mr Levichev. Of course, we have the nuclear power industry, and we are going to build a spaceport in the east, and we are going to speed up the development of GLONASS. We have added 45 billion roubles to the space programme, and this is quite a contribution. These are also high technologies.

But you have forgotten about other targeted federal programmes. What about the federal programme on scientific and educational personnel? I think it will seriously motivate young people and help create the right atmosphere.

And how could you forget about the 250 billion-rouble programme to develop fundamental science? What about the 130 billion-rouble programme on nanotechnologies? It would, of course, be great if our scientists made even more money. Everyone wants the same thing. Scientists want to earn more and we want to pay them more. At the same time, their salaries are about 40% higher than the national average. All in all, we will spend an additional 600 billion roubles for this purpose from 2008 to 2011.

You know we should not only channel money into this sphere, it seems there is never enough money, but we should also demand results from scientific research and should slightly change the structure of funding. Look at how the developed economies finance science. Business is paying two thirds of the funding, and only one third comes from the state. The latter is mostly funding fundamental science. Why? This is so because research is more precise. It is better adjusted to the interests of the economy and the social sphere. This is also a two-fold task.

Finally, I would say a few words about the population's mobility. It is certainly vital for national development. But let us agree that the metro's expansion alone will not resolve this task. When we talk about mobility, we mean transfer of manpower from one part of the country to another, not between districts of a metropolis. However, there is no doubt that metro construction is important for big cities.

We have already made some progress in helping families with children, adoptive parents, and so on. But we should certainly consider further steps in this direction.

As for the pension coverage, as you know, we have already set ourselves the goal of making pensions match the subsistence wage by the end of 2009. On January 1 of the next year, the public-sector salary fund will be increased by 30% in one increase. This is a serious decision, and I expect an adequate response from it. However, we should think of how we can improve pension legislation, and increase the salaries of public-sector employees, in particular, in education and health care. Next week, we should complete our work on the draft of the government programme for economic development through 2020, and these ideas will become part on it.

Thank you.