19 Nov 2020 16:38

Siluanov: 80 bln rubles to be allocated from NWF to support balance of regional budgets

MOSCOW. Nov 19 (Interfax) - The Russian government has backed a proposal by the Finance Ministry to allocate 80 billion rubles from the National Wealth Fund (NWF) to support 39 regions that have experienced financial problems in the current Covid-19 situation.

"In accordance with the president's instructions, given yesterday at a meeting with members of government, it is being proposed that 80 billion rubles be allocated from the reserve fund to support the balance of regional budgets. This is a part of the third tranche of financial support of constituent subjects, which is necessary for the regions due to the decrease in their income base," Finance Minister Anton Siluanov said at a government meeting.

The day before, at a meeting with members of the Russian government, President Vladimir Putin asked the cabinet to pay special attention to regions that have acute current financial problems. Putin noted that subsidized regions whose debts have been repeatedly restructured by the federal government should not cover their growing budget deficits against the backdrop of the Covid-19 pandemic through expensive bank loans.

The Finance Minister proposed that 80 billion rubles be distributed between 39 regions of Russia, as well as the city of Baikonur. "Grants should be given to regions in which on November 1st of this year local revenues have decreased relative to their predicted value. Furthermore, in distribution of subsidies attention was paid to the capabilities of the subjects to finance priority social expenditures, such as wages, maintenance of institutions, social support measures for citizens, medical insurance for those who do not work," Siluanov said.

A total of three tranches of allocated funds will go to support 76 regions. "The regions should direct the received funds to fulfilment of social commitments, as well as to expenses related to the operation of the health care system and other vital areas," he said, asking the government to support this decision.

"We support this," Russian Prime Minister Mikhail Mishustin said.

The head of government said that support for regions will continue, as many enterprises and SMEs have not fully recovered. "The volumes of tax and non-tax receipts for regional budgets have declined, and to ensure their sustainability, we have already directed 200 billion rubles in funding and will allocate another 80 billion rubles today to compensate for revenue shortfalls in some regions," Mishustin said.

The government expects that this will help the regions to level out the situation: to fulfill all social obligations to citizens, and to allocate funds to combat the spread of Covid-19.