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Prime Minister Vladimir Putin chairs Government meeting

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Prime Minister Vladimir Putin's introductory remarks:

Good afternoon,

Today, we will examine the programme to increase budget spending efficiency. I will not dwell on the contents of this document in great detail. That was already done in our report before the State Duma and at a recent joint meeting of the Boards of the Ministry of Finance and Ministry of Economic Development.

I would only like to add that the adoption of the programme was preceded by a lengthy and rather heated discussion between various departments.

I believe that we managed to reach optimal solutions. Now I would like all members of government to work closely and effectively towards implementing the provisions contained within this programme.

This year alone, we will have to implement over 40 different reform projects, including the drafting of amendments to the Budget Code. Moreover, the list of long-term state programmes and the relevant procedure for drafting them should be clarified.

As we agreed, projects stipulated by the Guidelines for Government Activities up to 2012 should form the basis of new state programmes. This involves such key aspects of the nation's future as solving our demographic problems, improving the quality of education, healthcare and housing construction, as well as economic growth, the introduction of innovations, increasing labour productivity and making production more energy-efficient.

Consequently, we will discuss a report by the Ministry of Economic Development on implementing the relevant guidelines alongside the programme to increase budget spending efficiency. Please single out those projects that are experiencing difficulties and falling behind schedule, where there are problems. Let's discuss this.

The most important thing today is that we expose ‘problem areas' requiring additional effort, so that we will be able to fulfill our plans.

Tax policy is one of the most important instruments we have for reaching long-term goals. Today we must finalise our plans in this area for the next year, that is, endorse a tax package designed to encourage innovation in the real economy.

It compensates for the rise in tariffs on mandatory social insurance for high-tech companies. As we agreed, during the transitional period we will retain the 14% rate for residents in technology development special economic zones, software manufacturers, and innovation and research companies at higher educational institutions. Reduced rates will also be in place for the media until 2015.

It also envisages changes in the rules regarding depreciation, specifies procedures for the calculation of R&D expenditures, a reduction in the number of documents required to prove eligibility for the zero VAT rate on exports and the three year-long exemption of new energy efficient equipment from corporate property tax, and so on.

I'd like to emphasise in this context that educational and healthcare institutions, including commercial companies, will be exempt from profit tax until 2020. We've already agreed that. Today we must make a final decision on that. The tax package also provides for some other measures.

At the same time, it is essential to substantially improve the quality of tax administration so that both the new and the existing benefits for high-tech production produce real, tangible results.

Approving the first single-industry city support projects is another major item on our agenda. This is our priority not only for 2010, but also going forward, because both current problems and matters pertaining to the overhaul of the national economy are closely intertwined on this issue.

We are planning to allocate 27 billion roubles from the federal budget for the development of single-industry cities in 2010. These funds are aimed at implementing infrastructure projects that will attract business and help create new, modern production lines, at supporting small and medium-sized businesses and at improving conditions in problematic cities.

In addition, the regional authorities, municipalities, management teams of major enterprises and interested investors must all implement their own measures in singe-industry cities.

As we have agreed, support will primarily be rendered to those single-industry cities that have submitted adequate and realistic programmes. Togliatti is the biggest of these cities. Under the plan, it will develop a technopark, called Zhiguli Valley, where new high-tech production lines will be located. The technopark at Zhiguli Valley will receive about 600 million roubles in funding.

Nizhny Tagil in the Sverdlovsk Region will implement small business development projects and those involving the modernisation of its transport systems and utilities, which will enable it to develop into a regional logistics hub.

In addition, the programme provides for the development of the chemical industry cluster. The cost of this project is 738 million roubles.

Experts have drafted a similar programme for the city of Sokol in the Vologda Region. It provides for the construction of a new industrial site fitted out with all the necessary infrastructure (the funding is 751 million roubles) and also for small business development projects (38.2 million roubles).

Extensive repairs to flats and the destruction of hazardous buildings will be carried out in all of these three cities. The Housing and Utilities Fund will allocate 1.6 billion roubles for these purposes.

This is all I wanted to say about the agenda.

In conclusion to my opening address I think it is an apt moment to congratulate our colleague Alexander Zhukov with his election as the head of the National Olympic Committee (NOC). We wish him success in his work and I'd like to ask you to support him in this new position.

I'd also like to inform you that I have signed a resolution on support for non-profit organisations that are actively involved in the preparations for the Olympics, such as those that are contributing to the promotion of Russian sports and the Olympic movement in general.

These funds will not come from the budget. They will come from the targeted deductions from the national lotteries. I'd like to ask the Finance Ministry to take action in this regard.

Let's get down to work.