Rustam Minnikhanov: ''There is a desire to improve their own situation at the expense of donor regions''
The Tatarstan president is afraid of the re-distribution of incomes and promises an uneasy year
The Tatarstan Cabinet of Ministers discussed the budget for 2019 on 14 September. It's supposed to adopt it with a deficit of 4 billion rubles. Reports began with positive information: despite sanctions, the economy was growing, but the further it was, the scarier it became. In the first half in 2018, 26% of enterprises of Tatarstan showed a loss, several legislative decisions on taxes on movable property and excises worsened the income of the regional budget, while donor regions turned out in not in a very good situation. Realnoe Vremya tells the details.
In the first half in 2018, 26% of enterprises of Tatarstan turned out unprofitable
''Despite the tension in geopolitics, trade and sanctions, economic growth is indicated in Tatarstan as well as in Russia, in general,'' Tatarstan Prime Minister Aleksey Pesoshin began the meeting on budgeting in 2019, 2020 and 2021 with an optimistic note. And he said in the beginning that the growth was insufficient, and it was necessary to look for new growth points and improve enterprises' competitiveness.
''Despite external negative factors, tendencies for growth in economic activity remain in Russia,'' Deputy Economy Minister of Tatarstan Oleg Pelevin continued in a positive manner.
But as it turned out from his report, there is nothing special to be glad about. Having enumerated achievements and plans for the future of core enterprises of the republic, Pelevin noted that 26% of Tatarstan enterprises turned out unprofitable in the first half of the year.
''There is a reduction in income in refining, agriculture, construction and commerce. Financial results worsen in some types of the economic activity amid the growing volume of investments in the fixed capital. But it's fine, investments will lead to growth in financial results in the future. Financial results in some sectors are worsening because of the reduction of the volume of investments,'' Pelevin specified.
The growth in industrial production slowed down, which the speaker linked with the prolongation of the OPEC oil production cut deal, reduction of wholesale trade and construction, which account for about 18% of Tatarstan's economy. He called the creation of Priority Social and Economic Development Areas an effective tool to attract investments. A PSEDA can appear in Mendeleyevsk in addition to the existing priority areas in Tatarstan at the moment.
Budget deficit of 4,1bn rubles
The budget for 2019 was designed considering that oil would cost $63,4 per barrel, while a dollar would be 63,2 rubles with its expected growth to 68 rubles in 2024.
Income and property taxes are the main source of income of Tatarstan's budget, Finance Minister Radik Gaizatullin reminded and drew the attention to the fact that the fourth quarter was approaching – time to pay taxes.
Tax and non-tax revenues equal to 178,6bn rubles were paid to the republic's consolidated budget for eight months this year. The total volume of tax and non-tax revenues in 2019 are forecasted to be 251,2bn rubles, 255,7 in 2020, 263,1bn rubles in 2021.
The expenditure of the consolidated budget excluding federal money in 2019 was forecasted to total 255,3bn rubles, 260,3 in 2020, 268,4bn rubles in 2021. The budget will be socially oriented, expenditures in this sphere will grow by 7,8%.
- Education – 75,0bn rubles;
- Health – 58,6bn rubles;
- National economy – 38,3bn rubles;
- Social policy – 34,5bn rubles;
- Nation-wide issues – 16,6bn rubles;
- Housing and utility services – 9,6bn rubles;
- Culture and cinematography – 9,6bn rubles;
- National security and law enforcement – 1,5bn rubles;
- Physical culture and sport – 1,5bn rubles;
- Mass media – 1,41bn rubles;
- Environmental protection – 558m rubles;
- Public and municipal debt management – 544m rubles.
The deficit of the consolidated budget in 2019 will make up 4,1bn rubles, 4,6bn rubles in 2020, 5,3bn rubles in 2021.
''There is a desire to improve their own situation at the expense of donor regions''
''The most important thing is that we conserve all the programmes fulfilled this year, we create new three-year programmes to put our summer camps in order. But you should clearly understand that several legislative decisions were made that worsen the revenue base of our budget: it's movable property, there are several approaches for excises. We work with our federal colleagues to get compensation, but it's a serious sum. The next year will be tense. But I'm not frightening you,'' Rustam Minnikhanov began to draw conclusions.
He reminded there are Putin's new May decrees, and Tatarstan must finance 19%. The State Council urged not to drag the budget approval: ''the budget must be adopted until 15 November'', while regional heads shouldn't delay cost sheets.
''You should provide raw data, we should prepare documentation, hold competitions from the beginning of the year, not in summer. Especially public spaces need an individual approach, there aren't model projects. School repair also needs inventory, there must be cost sheets and so on.''
As taxes are the main source of budget replenishment, a quarter of the enterprises ended the year with losses, and another task is to pay attention to them.
''The enterprises where a deficit grows or appears are the future candidates that won't pay a salary and taxes. And we need to quickly get involved in it.''
According to the Tatarstan president, ''it's clear everything will depend on the state of the economy, oil price'', and not only.
''The most important thing is not to have changes in revenue re-distribution. Unfortunately, donor regions aren't in a very good situation. There is a desire to improve their own situation at the expense of donor regions. Most importantly, our economy must work stably, our enterprises must have orders because they are our source of income tax, profit tax and property tax. It's also an important stage to know what support is needed from us to promote our products outside. Our well-being will depend on the effectiveness of our economy's operation,'' Minnikhanov concluded.