Transcript of the beginning of the meeting:

Vladimir Putin: Please describe conditions in the Territory.

Alexander Karlin: In addition to what I reported at the Government Commission meeting on Friday, I can say that the social and economic situation in the region is stable and under control.

For us agriculture is the basic industry - we have traditionally paid increased attention to it. This year, the land being cultivated for crops has grown substantially. Spring crops have been sown on 4.7 million hectares.

Vladimir Putin: Are the crop prospects good?

Alexander Karlin: Yes, the prospects are fine. The work has been done on time, according to the best recommendations. Now we are tending the sown areas.

Livestock breeding has also stabilised: both in head count and in productivity. As before, we are upgrading production: this year alone we bought two billion roubles worth of new farming equipment, which ensures the required productivity of labour and quality of work on the land.

Regarding the industrial sector, the situation here is, for well-known reasons, somewhat worse - especially in engineering. Nevertheless, the situation has stabilised. Over the past two months there has been no slump in production. Output of coke has increased slightly. Intensive negotiations continue and contracts have been concluded to repair rolling stock at the Altai Rail Carriage Building Works - it is one of the largest enterprises in our Territory.

With regard to the budget, the level of our revenues is a little over 80% on last year. Nevertheless, we are fulfilling our social obligations. Our budget problems are eased somewhat because we have practically no internal debt in the Altai Territory. Previously we did have debt - 4.5 billion roubles worth, but last year we paid it off. This year, in fact, the budget has no additional burden on repaying internal debt.

Public employee wages are paid in full. Even in public education - there is a large number of personnel and funds invested in it. We sent our teachers on holidays and paid them the appropriate holiday sums on a timely basis.

Education and healthcare are functioning normally, in general. We are upgrading them - you saw an example at one of the health facilities on Friday. We can say the same about education. We take part in two contest programmes: "Making education modern" and "Making school meals modern." Both are being implemented by means of the regional budget and other sources.

Vladimir Putin: Are there delays in paying wages in the budget sector?

Alexander Karlin: Practically none. Both federal structures working in the region fulfil their commitments, and we, correspondingly, fulfil our obligations for regional institutions. Some are budgeted through municipal budgets - these are the education and healthcare systems. There were some unpleasant episodes with which we dealt promptly and directly. They were the result of personal irresponsibility and lack of initiative at the municipal level. We take care of these questions.

Vladimir Putin: Mr Karlin, I would like to draw your attention to two matters. One is farm equipment building. We have just discussed it. I would like you to formulate your considerations and also submit them to the Government: both the Ministry of Economic Development and the Ministry of Industry. We have a use for them. I am referring to the plans which our Government departments are forming for the development of the country's farm equipment building. That is point one.

Point two is that on Friday we also discussed the situation on the labour market, and now one of the issues - you have seen it during meetings with people in the street - is connected with employment. The programmes drawn up by the Government in this direction must be used in full. On Friday, I drew your attention to the fact that your own plans are not being carried out in full. The funds allocated by the Government must be used in an effective way. I would like you to pay additional attention to this.

Alexander Karlin: I see, Mr Putin, thank you.