16 Feb 2023 16:24

State Duma lifts limit of 7% of GDP for investment of NWF funds in 2023

MOSCOW. Feb 16 (Interfax) - The State Duma has passed a bill in the second and third readings which suspends through January 1, 2024 the Budget Code provision according to which the National Welfare Fund may be invested only when the liquid assets in it amount to 7% of GDP.

The document (N291379-8) was earlier submitted to the parliament by Andrei Makarov, head of the Duma Budget Committee.

"This is because we actually have plans to invest 2.2 trillion rubles from the NWF into priority projects. A total of 1.7 trillion will go to self-supporting infrastructure projects and 500 billion towards anti-crisis investments. We suggest removing restrictions on NWF investment, the law prescribes 10% and 7%," Makarov said at the committee meeting. The list of types of financial assets, apart from foreign currency, in which NWF funds could be invested has also been specified.

Furthermore, the bill envisages provision of special treasury loans of up to 250 billion rubles to the regions in 2023. This refers to budget loans from temporarily available funds of the single account of the federal budget for up to 15 years, with a fee for their use of 3% per annum. These loans, as Makarov explained earlier, are to be used for modernization of the housing and utilities sector, and the total amount may be increased.

Regions will also be allowed in 2023 to exceed the state (or municipal debt) budget deficit level established by the law of the subject (or municipality) by the amount of special treasury loans.

The adopted law gives the Russian government the right to write off arrears of regions under budget loans in an amount matching the tax revenues to the federal budget from implementation of new investment projects, which will be approved before January 1, 2024. As the head of the budget committee Makarov explained earlier, as of January 1, 2022, 893 billion rubles were subject to write-off. The adoption of the bill will make it possible to double that figure.

The adopted document provides for the transfer from bank accounts to treasury accounts of balances of budget investments provided to legal entities until March 1, 2023. "The transfer to treasury accounts will mean 235 billion rubles in subsidies to banks and about 18 billion rubles of budget balances in bank accounts. It is envisaged that these be sent to the treasury account," Makarov said earlier. As part of the improvement of the bill, the funds provided to legal entities for fulfillment of the state defense order were exempt from the obligation to transfer funds from banks to the Treasury and "other cases by decisions of the Russian government" were stipulated.

The law will enter into force from the day of its official publication.