Economic plans for 2017-2019 budget

On October 28, 2016 the State Duma received the draft budget for 2017-2019. The key priorities of the budget are: assistance in economic growth, financial support of priority projects and complete fulfillment of the social obligations. Another important factor is the budget balance. While forming the budgetary framework, the Government used the conservative basis with the worldwide average oil price of 40 USD per barrel. It is expected, that till the end of the year the project «On Federal Budget for 2017 and the Planning Period of 2018 and 2019» will acquire the status of the Federal Law. The main budget indicators, submitted by the Government of the Russian Federation, are represented in Table 1.

According to the forecast, the main budget income will form on the base of non-oil and gas revenues. Their share will be 62,6%, the other part will be filled by oil and gas revenues. Main non-oil and gas revenues are nominally represented by three groups: domestic production, import and others. The income from domestic production includes: VAT (77,8% in the group), excises (21,7%), income tax (16,1%). The income from import is formed by VAT (79,6% in group), excises (2,5%) and entry fees (21,0%).

Within expenses the largest part is intended for social policy - 5,08 trn RUB (31,3% of total expenses), 2,83 trn RUB (17,5%) for defense, 2,32 trn RUB (14,3%) for national economy, 1,94 trn RUB (12,0%) for national security and law enforcement activities, 1,20 trn RUB (7,4%) for national issues. Other articles take from 5% - 1% or less of total expenses. For public and municipal debt management is planned to allocate more than 728 bln RUB - 4,5% of total expenses. The deficit between income and expenses is planned to cover by the Reserve Fund, the National Wealth Fund, borrowings and other sources.

Within the budget expenses can be divided on 5 directions:

• New living standards (13 government programs) - 3,2 trn RUB are planned,
• Innovative development and modernization of the economy (18 programs) - 1,99 trn RUB,
• National security protection (1 program) – 1,7 trn RUB,
• Balanced regional development (6 programs) – 0,99 trn RUB,
• Effective State (4 programs) – 1,58 trn RUB

The budget expenses also include financial support for the development of certain industries within the government programs. Among such industries are: aviation industry, shipbuilding, electronic and radio-electronic industry, pharmaceutical and medical industry, agriculture, the development of fishery industry and others. It is also planned to support the export in the following industries: car industry, aviation industry, agricultural engineering industry and railway machinery.

The next three years are expected to be complicated. Economy will continue to be under the influence of internal and external negative factors; its significant restructuring and capacity increase are not expected. The previous economy model, based on export of raw materials and stimulating of consumption, has reached its limits. It is expected, that potential increase in economy growth is possible only after structural measures, the effect from which appears after a certain time; that was taken into account while budget planning.