Duma approves amendments allowing domestic debt to rise by 51 bln rubles in 2010
MOSCOW. April 23 (Interfax) - The State Duma on Friday approved government amendments to the law on the 2010 budget and the 2011-2012 planning period that raises the limit on the state's domestic debt by 51.3 billion rubles.
The Duma passed the amendments in a first reading without alteration.
The increase would raise the limit on domestic debt to 3.353 trillion rubles as of January 1, 2011.
The limits on domestic debt in 2011 and 2012 will also increase: by 51.3 billion rubles to 4.161 trillion rubles and by 70.8 billion rubles to 4.415 trillion rubles respectively.
The revisions are needed owing to the volume of state guarantees, which will equal 787.127 billion rubles in 2010, 823.826 billion rubles in 2011 and 823.426 billion rubles in 2012.
The law increases to 175 billion rubles (from 100 billion rubles previously) the amount of unallocated funds from 2009 that will be used to finance the state guarantees on obligations and loans raised by organizations to finance investment projects.
A number of conditions for providing those guarantees will also change, including expanding the guarantee to cover interest payment.
State guarantees for the defense sector will decline to 47 billion rubles from 75 billion rubles, and guarantees for select enterprises will fall to 108 billion rubles from 225 billion rubles. The cuts take into account guarantees provided in 2009.
Companies in Chechnya will be eligible for 15 billion rubles of guarantees, up from 10 billion rubles currently. The increase will be financed with funds carried over from last year.
The bill includes 3 billion rubles in guarantees for Rosavtodor, 46.28 billion rubles for United Aircraft Corporation and 21.526 billion rubles for Oboronprom.
Another provision in the bill authorizes the government to allocate the equivalent of $676 million in budget funds to purchase Sistema's subsidiary in India - Sistema Shyam Teleservices Ltd. (SSTL). Those funds will come from payments on India's sovereign debt to Russia (and may be spent only in the form of Indian rupees).
The government received the right to purchase the shares in 2009, although the deal was never transacted. The current 2010 budget does not contain the spending item. Deputy Finance Minister Dmitry Pankin said the provision in the 2009 budget will be inserted in the revised budget, with the same wording and in the same amount.
The bill would also increase the maximum term for state borrowing to 30 years from 20 years currently, which would allow Russia to issue 30-year bonds as early as 2010. The change was recommended by consultants in the West. "It doesn't mean that we're definitely going to place 30-year [instruments], but potentially there is demand for such securities," Pankin said.