Transcript of the beginning of the meeting:

Dmitry Medvedev: We have an opportunity to discuss planned amendments to the law on the federal budget for 2012 and for the 2013-2014 planning period. It’s really great that federal budget revenues, treasury income, are constantly outstripping budget expenditures. This allows us to use the extra funding to address priority issues, primarily of course, social issues. I would like to remind you that additional budget revenues total 322 billion roubles, the bulk of which this year, around 210 billion roubles, came from economic sectors other than the oil and gas industry. The additional budget revenues were due in no small part to the privatisation of Sberbank shares (150 billion roubles) and dividends from Rosneftegaz operations (about 50 billion roubles). 

Naturally, these extra revenues will be spent on priority areas. So what are they? The money will be used to develop the road and energy infrastructure in the Far East and on the development of the Far East as a whole; and to develop the transport infrastructure of the Moscow Region and build bridges and roads in various Russian regions. There are plans to channel an impressive 20 billion roubles into the
State Corporation Housing and Utilities Reform Fund, so that it can fulfill its statutory objectives. About 10 billion roubles will be spent on the construction and purchase of housing for military personnel, primarily near Moscow where the main construction projects are being implemented. Part of the funding will be spent on regional subsidies, which should ensure a well-balanced budget system. In addition, we face urgent needs that arise each year. This year, the country’s agriculture sector experienced a drought and other problems, so we need to finance projects to overcome the consequences of the drought, like we promised farmers. We must also help the Far Eastern Federal University with its laboratory projects. There are some other problems, including the Saratov Youth Theatre, which was almost completely destroyed by fire. We must help them too. And we ought to implement some other ideas which we will talk about now.

The most important thing is for us to focus on fulfilling our social obligations. The budget remains well-balanced and realistic. Nevertheless, what we are going to discuss now will enable the budget for 2012 and for the coming period to be considered as a development budget, in which we will try and implement our long-term plans and projects, try to support innovation and business activity, and create new production facilities and jobs. In the long run, this amounts to a new quality of life.

And now let’s discuss more mundane matters. Mr Siluanov will discuss in greater detail what can be done. Please go ahead.

<...>

Minister of Finance Anton Siluanov comments on the results of the meeting to journalists

Anton Siluanov: Today, Prime Minister Dmitry Medvedev chaired a meeting to amend the 2012 budget. The Ministry of Finance, in conjunction with the relevant ministries and departments, has prepared proposals on amending this year’s budget as a result of adjustments to the macroeconomic forecast and of ministerial and departmental proposals to redistribute the budgetary funding, which have come about as a result of savings made.

The total amount of budget expenditures which we are proposing to redistribute comes to 332 billion roubles, of which 235 billion are accounted for by additional budget revenues, primarily through such resources as Central Bank profits from the sale of Sberbank shares in the amount of 149 billion roubles; additional revenues worth about 50 billion roubles, due to be received by the Russian Federation as dividends from Rosneftegaz operations, and certain other revenues.

How will we spend these funds? First of all, these funds will be used to support the infrastructure and to support the investment development of the Russian Federation and its regions. I would like to note that we intend to channel 62 billion roubles into the Russian Direct Investment Fund. The money will be used to attract private investment, primarily foreign investment. This will make it possible to expand and develop infrastructure projects in the Russian Federation. About 25 billion roubles which are earmarked for the Russian Direct Investment Fund will be invested in the Far East.

Moreover, we will support Russian regions which were affected by drought this year. They will receive 6 billion roubles. We will also increase subsidies in the amount of 9.5 billion roubles to enable them to balance their budgets.

Around 25 billion roubles, a significant figure, will be spent on expanding the Moscow transport hub, including the development of the road network, as well as supporting and developing rail transport in  Moscow.

These amendments will mean that, taking into account additional revenues and additional spending proposals, there will be a 0.07% budget deficit  this year. In other words, we’ll have a virtually deficit-free budget. These amendments will ensure that the resources for 2012 will be spent more effectively, and we hope that the State Duma will support the Government’s proposals. Thank you.

Question: Please tell us about the 158 billion roubles obtained from the privatisation of Sberbank …

Anton Siluanov: 149 billion.

Question: Yes, 149 billion. And will this entire sum be allocated in 2012? Or will part of it be spent next year?

Anton Siluanov: The entire sum will be spent in 2012.

Question: Will this sum be linked with some specific … or will it be channelled into the budget and subsequently allocated from the common pot?

Anton Siluanov: Incoming revenues from the sale of Sberbank shares, incoming Central Bank revenues, as well as Rosneftegaz dividends, will be used solely to expand and develop infrastructure investment projects, so this is very important. We are not creating any additional current liabilities and all the proceeds from the sale of our assets will be spent on development. This is very important. And this proposal was supported by the Prime Minister. Thank you.

 <…>