Tatarstan deputies for federation and two presidents in Russia
Deputies of the Tatarstan State Council are excitedly discussing an initiative launched by federal deputies who offered to define the top official in the regions only as “governor of a Russian region.” The parliamentarians don’t like such an idea — they are against it because in case the bill is adopted, Tatarstan will have to refuse the name “president” for the republican leader. Also, during the meeting on 25 October, the deputies touched on economic summaries and forecasts. Industrial production is expected to reach 105,4% thanks to oil products and mechanical engineering in Tatarstan by late 2021. The authorities wait for similar growth in 2022 too, however, it is supposed to be slower. It will mainly depend on the petroleum state of affairs, though the Tatarstan Ministry of Finance plans to reduce the share of oil in income tax from 50 to 46%. The republican Ministry of Finance, in turn, hopes for a rise in Tatarstan citizens’ real incomes in 2022 despite a dangerous acceleration of inflation this autumn.
Tatarstan wants to keep the president
Deputies of the Tatarstan State Council briefly discussed the hot-button issue of domestic politics: the State Duma offered to establish a unified approach to naming top officials of Russian regions. According to the idea of the authors of the bill, such an official must be called only “governor of the Federation’s region,” and no other way. So Tatarstan has been affected by the novelty where the official is still named president, not governor like in other Russian republics.
The Tatarstan deputies didn’t appreciate the State Duma’s proposal. The parliamentarians would like to keep the situation securing the name “president” for the top official of the Republic of Tatarstan. Due to this, at the meeting on 25 October, they unanimously didn’t support the federal colleagues’ project and are planning soon to send a decree of the State Council on this issue to the Lower Chamber of Russian Parliament. The deputies representing the republic will have to defend Tatarstan’s position there.
Speaker of the Tatarstan State Council Farid Mukhametshin hopes that the Tatarstan parliament’s cautiousness and the absence of support from its deputies can make significant changes to the project of the bill introduced in the State Duma.
The draft of the bill that is discussed by the deputies was introduced in the State Duma as early as last month. The proposal of establishing a unified approach to naming the regions’ top officials was received from Senator Andrey Klishas and deputy of Russian Parliament’s Lower Chamber Pavel Krasheninnikov. The State Council’s deputies think the law contradicts “norms of the Russian Constitution.”
“This violates the principles of the federative state founded in the Constitution of the Russian Federation”
Chairman of the Tatarstan State Council’s Committee for Statecraft and Local Self-Government Albert Khabibullin claimed that the bill itself, which was received by the State Duma for consideration, was discussed in Tatarstan Parliament in a task force chaired ин Vice Speaker Yury Kamaltynov. The task force concluded that it has both positive and negative moments. In particular, the bill includes moments aimed to implement the amendments that were made to Russia’s Constitution after the voting in 2020, which reads “constitutional foundations of the unity of public authority develop, the mechanism of interaction between public power agencies in regions improve, consequently, the norms related to the regions’ authorities over joint jurisdictional issues are spelt out.”
At the same time, the Tatarstan State Council concluded that certain provisions of the bill directly contradict the basics of the Russian Constitution, according to which Russia is a democratic federative state:
“We assume that this bill in the current edition moves away from the establishment of common principles of legal regulation of the activity of public power agencies in the Russian regions by regulating the formation of the system of regional public power agencies in detail. This violates the principles of the federative state founded in the Constitution of the Russian Federation,” Albert Khabibullin explained. “The authors of the bill offer to unify the names of the top official’s post, public power agencies, establish possible terms of office of regional parliaments and the top official.”
Moreover, the State Duma deputies who voted against believe that the case is not only about the “cases of performance of delegated federal duties by regional power agencies” but also the cases of performance of duties within the regions’ own jurisdiction, Tatarstan in this case. The republican parliament cited Article No. 73 of the Russian Constitution.
Another argument against the bill is that there is a chance that the regions will lose the right to participate in law-making at federal level. After analysing the document, the State Council deputies concluded that the 15-day term fixed for regions’ to express their opinions about drafts of federal laws on joint jurisdiction issues of Russia and its regions in fact divests them of their right to participate in the process of their elaboration and adoption:
“The authors of the bill don’t take into account that most deputies of regional assemblies fulfil their duties not on a regular basis, while meetings of regional parliaments are, as a rule, held as often as once a month,” Khabibullin explained.
The Tatarstan deputies intend to go back to the discussion of how the region’s top official must be named after the State Duma adopts a draft of the federal law No. 1256381-7 On General Principles of Organisation of Public Power in Regions of the Russian Federation that was introduced for consideration at the first reading. Tatarstan is getting ready to respond to this event with amendments to the document.
Industrial production expected at 105,4% in Tatarstan due to oil products and mechanical engineering
Discussing the draft of the law on Tatarstan’s budget for 2022 and 2023-2024 at the first reading, one of the key speakers Minister of Economy of Tatarstan Midkhat Shagiakhmetov cited the “uncertainty of the growth trajectory” in the world economy, which is conditioned not only by epidemiological but also economic factors. However, despite the “general unstable situation in the world economy” and complex processes in world markets, the Russian economy has returned to the pre-crisis level, he thinks.
“The economic recovery is conditioned, first of all, by production expansion in the processing sector, construction, commerce,” Shagiakhmetov claimed.
An almost the same situation is reigning in Tatarstan when industrial production accounts for the biggest share in the economy thanks to whose enterprises and their production ramp-up plans, the authorities expect the industrial production growth index to be at 105,4% in the fourth quarter of 2021. Again, mainly due to the production of oil products and mechanical engineering. The unequal impact of the pandemic as well as a number of other factors led to a situation when some sectors grew, while others fell.
Retailing increased, Agro-Industrial Complex collapsed: what sectors suffered from the crisis and what didn’t
Retail commerce has risen in 2021, at the moment by 8,5% compared to 2020. The construction market is expected to grow by the end of 2021 in Tatarstan too. Moreover, 50 billion rubles are pumped into this sector within as many as 44 programmes designed to improve the housing infrastructure. It is noteworthy that Tatarstan State Council deputy Nikolay Rybushkin expressed his hope that a part of the money in these programmes would be spent to develop settlements, including urban ones. What is more, he claimed, their number in Kazan alone is 74, while his territory has 11. He put an example that the replacement of water supply networks will require 26 billion rubles. The Ministry of Economy promised to take this wish into consideration.
While the anomalous weather resulted in a collapse in the Agro-Industrial Complex, in fact, by 20%. The harvest totalled just 81,7% than in 2020. This primarily happened because of grains where Tatarstan’s complex fell by 35%.
Tatarstan expects growth in 2022 too, though a slower one, mainly depending on the oil situation
As a consequence, the economic arm of the government can carefully forecast some growth till the end of the year. Particularly GRP is supposed to amount to 2,9 trillion rubles, or 103,8% compared to 2020. Nevertheless, the Ministry of Economy’s forecast for 2022 is alarming: according to the predicted gross regional product growth pace, the Tatarstan economy will anyway slow down. As it is expected in the Tatarstan Cabinet of Ministers, the pace will be just a bit slower reaching 103,6%, not 103,8% like in 2021.
But even though the economy of Tatarstan will grow next year, this will be done thanks to the black gold. So firstly, 35% of the growth will depend on industrial production and just 19% on the Agro-Industrial Complex, 17% on commerce. 70% of the industrial production index planned at 103,4 depend on oil and petrochemical companies. In 2023-2024, the index is due to be 104%.
The Ministry of Economy hopes the population’s real incomes to rise in 2022, but inflation is speeding up
At the same time, the Tatarstan authorities wait for the Agro-Industrial Complex to grow by 110%, including 126% in grains, 120% in animal husbandry if, course, the anomalous hot weather doesn’t come back. Forecasted numbers in the food industry’s growth in 2022-2024 drop a hint to this, just 1,9%.
Among other expectations, we should single out the forecast for retailing whose amount is to grow by 2,4% in 2022. The growth pace of investments in 2022 is expected to reach 104,7% and total 73 billion rubles. To compare, with a similar pace of 104,5% in 2021, they were just 65 billion rubles. While the Tatarstan authorities must perform Russian President Vladimir Putin’s tasks and reach a bigger amount of investments by 70% by 2030 compared to 2020. Making non-commodity exports reach 70% is another tough task of national projects.
Finally, the Ministry of Economy expects Tatarstan residents’ real incomes to grow by 3,1% in 2022. It is also planned that the real salary rise, that’s to say, considering inflation that is unclear what to be like, will be 102,7% compared to 2020. Seemingly, the fact that the average salary in 2021 has risen by 11,6% against 2020 caused the functionaries’ optimism. However, inflation is the key factor influencing the “real” salary.
The consumer price index is expected in the Ministry of Economy in 2022 to be equal to 104%. But nowadays, as it is known, inflation is growing around the world. The same is in Tatarstan: in September, according to Shagiakhmetov, it accelerated to 105,6% compared to December 2020 and 107,7% compared to inflation in September 2020. Transportation, consumer lending dynamics and world factors including volatility in the energy market have an impact on the acceleration of inflation in the Republic of Tatarstan.
Budget for 2022 is currently drawn up with a deficit of 11 billion rubles
Head of the Tatarstan government’s financial division Radik Gayzatullin’s report on budget parameters for 2021 became the second key speech of the day. However, interestingly, the deputies themselves discussed it last Friday. But according to the finance minister’s new data, the budget deficit will rise by another 5 billion rubles. This means that the deputies and functionaries will have to really work hard to find 11 billion rubles in 2022 to fund a huge amount of expenditures, which also impressively increased on paper from Friday to Monday.
Nevertheless, Gayzatullin looked calm near the pulpit and optimistically enumerated forecasted tax numbers in 2022, which by the way, must cover the deficit in theory. Otherwise, the federal centre will have to be asked for the money.
In 2022, Tatarstan expects 90 billion rubles of corporate tax, half of which is from oil
So at the moment, the Ministry of Finance expects that corporate tax paid to the Tatarstan budget by the republic’s organisation to be 90,2 billion rubles in 2022. In reply to deputy Marat Galeyev’s concern if the share of oil and petrochemistry wouldn’t change for the better from a perspective of corporate tax, the finance minister noted that petrodollars account for half of this tax in 2021. But the Ministry of Finance hopes to reduce this amount to 46% in 2022.
Income taxes paid to the total Tatarstan budget are supposed to be 93,4 billion rubles, of which 65 billion are paid directly to the budget of the republic. Tatarstan also plans to collect 33 billion rubles of excises, 28,3 billion of property tax, 81 billion of land tax, 6,1 billion of transport tax next year.
Nearly 18 billion rubles of total tax must become one of the main payments. While municipal budgets, in turn, intend to collect natural persons’ property tax equal to 28,4 billion rubles in 2022. Non-tax incomes of the Tatarstan budget, including rent and sale of public property, are to be almost 10 billion rubles. The 2022 budget separately includes non-repayable transfers from the federal budget totalling 48,9 billion rubles. Excluding the possibility of protection of republican projects in 2022 to get federal loans for infrastructural plans of Tatarstan, the Ministry of Finance claimed that at the moment projects that are worth 1,4 billion rubles are defended.
69,5 billion rubles of the collected incomes will be spent on the national economy with road maintenance, major repairs, transport and the Agro-Industrial Complex, 20,8 billion rubles will be spent on housing and utility services, 5,9 billion will be on the environment. Costs on the most expensive socio-cultural sphere will increase by 12,2%, while the expenses in this area must rise by 24% by 2024 in comparison with 2020. In 2022, 109,8 billion rubles here will be allocated for education, another 85,7 billion will be on health care, the social policy will receive 55,4 billion. More than 20 billion rubles from the Tatarstan budget are going to be used for subsidies and different transfers.
So from a perspective of incomes, compared to the initial parameters the budget rose from 281,4 to 294,8 billion rubles, while costs increase from 287,5 to 305,7 billion respectively. The deficit, in the end, grew from the scheduled 6 billion to nearly 11 billion rubles.
According to Chairman of the Tatarstan State Council’s Committee for Budget Leonid Yakunin, 80% of the 2022 budget the deputies adopted at the first reading is socially oriented. Also, it is planned to allocate 26 billion rubles in 2022 for national projects in health care, education, culture and a comfortable living environment.