May decree will fall on the regions

The Ministry of Finance expects that the budgets of the Russian regions will assume about a third of the cost of implementing the new May decree of Vladimir Putin.
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This was announced at a round table in the Federation Council by the Deputy Head of the Ministry Yuri Zubarev. “Achieving a national goal is impossible without regional participation. The format of regional participation in national projects is spoken and worked out. Indicatively, about 30% of the required amounts. It is assumed that this will be a regional part. This amount varies across projects,” RNS said.
Recall that the authorities are looking for sources for the implementation of national projects, declared as priorities in Putin’s May decree. The cost of their implementation is estimated at about 8 trillion rubles.
According to Zubarev, additional sources of funds for national projects will also be a change in tax legislation and an increase in borrowing in the market. "Each national project will have specific goals, objectives and personal responsibility of the contractor.The implementation of national projects will be tightly controlled at the governmental and presidential levels, the ministers will be personally responsible for the progress, the implementation of projects and their effectiveness, "he said.
Earlier, the regions have already begun to calculate their own expenses for the implementation of the May decree. Thus, Yakutia will need almost 600 billion rubles to implement 12 national projects and national programs that the government is developing under the new May decree. This, according to Tass, told reporters and. about. Minister of Economy of the region Maya Danilova. According to her, only for the elimination of more than 1 million square meters. m of emergency housing region will need 96 billion rubles. To achieve the goals of reducing mortality and increasing life expectancy, construction of large health facilities, increased funding for sanitary aviation, and modernization of FAPs are required. Funds will also be required to finance the construction of regional roads, social and technological infrastructure.
On July 18, the State Duma adopted in the second reading a bill on raising the value-added tax rate from 18% to 20% (VAT).The government submitted it for consideration on June 16, along with a bill to raise the retirement age. Raising the tax rate, according to the Cabinet, will give the budget from 600 to 630 billion rubles a year with a tendency to further growth, according to RBC. The government plans to spend these funds on social programs to implement the new May decrees.
The Bank of Russia appreciated the possible increase in prices from a VAT increase of 1 percentage point, which may be partially noticeable already this year. At the same time, First Deputy Prime Minister Anton Siluanov said earlier that the rise in price of vital goods such as bread, cereals, certain types of meat, butter, is not expected, as they are subject to a preferential VAT rate, which is not planned to be increased yet.
Recall, on May 7, 2018, on the day of his assumption of office, Russian President Vladimir Putin signed a May decree defining the main goals and objectives of the country until 2024. The document requires the government to take a series of measures to implement "breakthrough scientific, technological and socio-economic development" of Russia. The goals include joining the five largest economies in the world, reducing the poverty level by half, increasing life expectancy to 78 years (by 2030 to 80 years) and inflation not exceeding 4%.
Deputy of the City Duma of Yuzhno-Sakhalinsk from the UR faction Yevgeny Lyuby believes that many regions will not cope with such an increase in the load: the federal budget. <...> It is thanks to the taxes that go into the state budget that assistance is given to weak subsidized regions, which will not be able to execute May decrees on their own under any circumstances. If we proceed from such a tax It’s safe to say that surplus regions can easily cope with the workload and manage to fulfill presidential decrees, but there can be a problem with scarce actors. I mean the deterioration of the already difficult situation in these regions. "
Deputy of the Yaroslavl Regional Duma, member of the Public Chamber of the City of Yaroslavl Alexander Goncharov notes that in this situation much depends on the regions themselves: "Of course, the regions should deal with increasing their own revenues. This requires a competent tax policy of the federal center that would allow to stimulate, and not stagnate economic development. Theoretically, some of the programs in the decrees are well forgotten old ones.In May decrees almost no new programs. In this regard, the figure that the regions need to find is very tense, but if you start to increase your own incomes at least within 5% annually, then theoretically it will be possible to fight for a difficult task.
Candidate of Economic Sciences, Associate Professor at the Department of Theory and Practice of Management of the Orenburg Branch of the RANEPA Tagir Sharipov is sure that the regions are unlikely to ensure the fulfillment of the May decree: Including for the Orenburg region, the budget of which, although it is deficit-free, but is very strictly planned only for priority expenses. <...>
Summing up, I consider it necessary to note: although it will be difficult for the regions to cope with the additional burden on their budgets, I fully support the proposal of the Deputy Minister of Finance Yury Zubarev, since only co-financing will effectively implement the May decree of the Russian President and implement breakthrough scientific, technological and socio-economic development of the Russian Federation, otherwise the regions will wait for money and generate dependency. "
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The full version of the material with detailed comments of experts can be read here.
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