| The government is seeking money to raise wages for the military
and state employees in the provinces. On May 15, Prime Minister
Mikhail Kasyanov announced that the federal budget for 2002 would
be revised, and unplanned expenditures would be covered through
additional revenues. Duma deputies do not believe this and say
that this is impossible to do without sequestration, at least
a small amount for the time being.
The Prime Minister explained to the deputies that "corrections
of the budget for 2002" are necessary to cover the planned
wage increase for servicemen from July 1. The government is also
concerned about growth in wage arrears in the regions. According
to the Prime Minister, by April 1 wage arrears in the provinces
increased to 4.5 billion roubles. Kasyanov promises to find the
money to account for "manoeuvres," that is, a re-division
of expenditures and collection of additional revenues. There may
be problems with additional revenues. Kasyanov admits that fiscal
agencies cannot catch up with the pace of tax reform, consequently
tax revenues do not grow as quickly as the government would like.
According to a source in the entourage of the Prime Minister,
amendments to the budget will be submitted to the Duma in the
next few weeks. Deputy leader of the Yabloko faction Sergei Ivanenko
expects the government to try and achieve passage of the amendments
to the budget as soon as possible. Consequently the government
asked the deputies to prolong the spring session until July 1.
A government official admits that during the amendments budget
expenditures may grow slightly, but "there will be no deficit
in any case," and the financial reserves will not be spent
on mending of holes in the budget by any means. The government
will also attempt to include permission for additional domestic
borrowings into the budget. The government needs money to buy
out 99.9% of Vneshtorgbank shares from the Central Bank (the cabinet
plans to pay the Central Bank with state securities.)
See also:
Budget
2002
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