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Prime Minister Vladimir Putin chairs a meeting of the Russian Government Presidium

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During the Government Presidium meeting Prime Minister Vladimir Putin said that he had signed all the necessary documents for the draft federal budget for 2011 and subsequent two years to be submitted to the State Duma. The prime minister mentioned that the draft budget provided for a reduction of budget deficit to 3.6% of GDP. He said that sections detailing budget expenditure earmarked funds for the next indexing of pensions, social benefits, maternity capital, payments to servicemen, salaries for public-sector employees, as well as for the continued implementation of housing programmes and other government commitments to the people.

Prime Minister Vladimir Putin also informed the meeting about the additional two billion roubles that the government has allocated to support small and medium-sized businesses in the regions. In addition Russian regions are to receive an extra 4.6 billion roubles to support one-industry towns.

The prime minister also voiced the government's intention to provide additional support, amounting to five billion roubles to agricultural producers, first of all to those who suffered losses due to the unusual summer drought. With that in mind he instructed the Ministry of Finance to tighten control over the delivery of funds to specific consumers.

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, esteemed colleagues,

I would like to begin with the most immediate issues. Ms Golikova (addressing Health and Social Development Minister Tatyana Golikova), what progress has been reached in implementing the amendments we have adopted to the law on using the maternity capital? We came to the agreement that young mothers would be able to use some 12,000 roubles during the year. Please.

Tatyana Golikova: I believe that before speaking about this resolution, it is necessary to mention that nearly 2.3 million people have the maternity capital at their disposal today.

Vladimir Putin: Repeat that figure, please.

Tatyana Golikova: Some 2.3 million people have certificates for the maternity capital. Already in 2010, 455,000 people have received certificates for the maternity capital. And 2010 is the first year when the maternity capital can be used in three ways, which the law had initially stipulated. In terms of this year, the Pension Fund has accepted 27,000 applications on the usage of the maternity capital, with 24,000 applications on housing and improving housing conditions worth 7.7 billion roubles; 2,800 applications on education worth 172 million roubles and only 210 applications on transferring funds to the cumulative part of the mother's pension worth 38 million roubles.

In terms of the anti-crisis measures, which we adopted last year, some 239,000 applications worth 71 billion roubles were filed for repaying housing loans in 2009 and 2010. And about 195,000 Russian families have fully or partially repaid mortgage loans worth 57 billion roubles via the maternity capital. This is quite a large amount. In 2010, some 130,667 families filed applications worth 41.3 billion roubles for these purposes, and about 30.5 billion of that amount has already been repaid.

As for those 12,000 which we introduced in 2009, about 90% of those possessing the certificate for maternity family capital have used this money.

If we consider the fact that we extended this standard in the middle of the year, we have some 99,078 applications worth 1.2 billion filed at the moment, and of course, we are starting to pay out this amount, indeed we are paying it out.

Vladimir Putin: And the funds can also be used for individual housing construction.

Tatyana Golikova: We haven't started to make payments in this field yet because it is a somewhat more complicated procedure, but we also expect to get down to it in the fourth quarter. And another important thing: When putting together the budget for 2010 we planned to have 102 billion roubles allocated to use for the maternity capital. We had doubts about spending this amount in the middle of the year. But we do not have any doubts now. The entire 102 billion roubles will likely be used, the larger part of which will go to housing.

Tatyana Golikova: The maternity capital is supposed to be used for building individual housing by contracting construction organizations without any intermediaries. This means that people will be able to receive these funds if local authorities confirm that they will indeed be spent on building a house. You remember that there was a very lengthy discussion over whether beneficiaries should be allowed to use these funds by themselves. Considering the significant number of applications, you have supported this idea and we will be implementing it.

Vladimir Putin: What do you think, how many people will take advantage of this?

Tatyana Golikova: It is difficult to estimate, Mr Putin. Considering the fact that this arrangement will only be available in the fourth quarter of this year, I don't think that many people will use it. Maybe, about 5,000 families.

Vladimir Putin: And the data for the fourth quarter will allow us to predict the amount for next year.

Tatyana Golikova: Yes, it will enable us to make forecasts for next year.

Vladimir Putin: Good.

Tatyana Golikova: We are convinced that the allocated funds will suffice. We had a similar experience in 2009. Earlier we allowed the maternity capital to be used to repay mortgages or the interest on them and allocated the proper amount for that. That's why we set aside 102 billion roubles for this purpose in 2010.

Vladimir Putin: Another issue is the co-financing of pension savings: the 1,000 roubles paid by the government in addition to citizens' voluntary contributions to their pensions.

Tatyana Golikova: Despite certain effects from the financial crisis, the overall results for the reported period are quite unexpected for us. Over the past nine months...

Vladimir Putin: Please, remind our colleagues what we are speaking about.

Tatyana Golikova: We are speaking about the programme which includes an equal contribution from the government for every voluntary contribution that a citizen makes to his pension savings: one rouble for one rouble, 1,000 for 1,000...

Vladimir Putin: You mean the cumulative part of the pension...

Tatyana Golikova: Yes, the cumulative part, the 12,000 roubles programme. As of today, 3,217,688 Russian citizens have signed up for voluntary pension savings, which is 2.3% of the country's population. One million people joined the programme in 2010.

The breakdown of these people is as follows: people from 30 to 50 years of age make up 52.7% of all those who joined the programme, 28.4% of participants in the programme are older than 50 and 18.9% of them are under 30. Women are more active in this respect and account for 66.4% of these people. The Pension Fund has already received 1.74 billion roubles for this purpose in 2010, which is 655 million roubles more than in the same period of last year.

The most important thing is that the average voluntary contribution to the pension savings was 3,500 roubles last year and, over the reported period of this year, it has already increased by 1,000 to 4,500 roubles. Meanwhile, last year the contributions to pension savings peaked in the fourth quarter. We expect this trend to continue and we think that we will see positive changes both in terms of the number of people who joined this programme and the size of the voluntary contributions.

Vladimir Putin: All in all, this is good progress.

Tatyana Golikova: Yes, it is. We did not expect that so many people would be willing to join the programme in such unfavourable financial and economic conditions.

Vladimir Putin: Good.

Mr Ivanov, let's discuss the government policy for the Arctic and the upcoming meeting of the Maritime Board.

Sergei Ivanov: Yes, Mr Putin, we plan to hold a meeting of the government's Marine Board during our working visit to Murmansk on Saturday. This meeting will focus on two important issues.

The first one is the implementation of the principles of Russia's national policy on the Arctic for the period until 2020, which have already been adopted by the government.

The second issue is the investment project to develop Murmansk's transport hub and measures to advance the maritime sector in the Murmansk Region.

These two issues are directly related to the Arctic. The first one does not need further explanation, to my mind, it is clear. As for the second issue, the Ministry of Transport believes, and I agree with them, that the Murmansk transport hub is a favourable location for setting up a state-of-the-art sea port with intensive cargo traffic.

In fact, Russia has only two ice-free ports with direct access to the world's oceans and seas that avoids straits and the problems related to them - one on the coast of the Pacific Ocean and Murmansk. That's why we will carefully study this investment project which in fact envisages the construction of a new port on the opposite shore of the Murmansk Bay and all related infrastructure.Apart from the meeting of the Marine Board, there will be two more significant events, I believe.

The first event is the October 2 launch of the latest high-latitude Arctic expedition aboard the Rossiya nuclear-powered icebreaker destined for the North Pole-38 drifting ice station. I will personally meet with Artur Chilingarov, who will lead this expedition. The expedition includes 15 polar explorers, who will spend nearly the whole next year on an ice floe in the North Pole. The landing site for the expedition has already been chosen. And, of course, we expect that the expedition will result in a lot of scientific data (primarily on the ocean, the ice and the climate) that will aid in the exploration of the Arctic and monitoring climate changes taking place there. In my opinion, this event is very important.

Second. The second Arctic International Economic Forum will take place in Murmansk following the Moscow Arctic forum you recently attended. It will focus on the exploration of the Arctic shelf as well as the development of the Shtokman natural gas field and the Murmansk transport infrastructure. The forum participants will also discuss a number of issues regarding economic activities in the Arctic with due account of preserving the vulnerable local environment.

These are the events devoted to the Arctic.

Vladimir Putin: Mr Levitin (addressing Russian Transport Minister), are you ready to face the challenges connected with the construction of a major transport hub in Murmansk?

Igor Levitin: Yes, everything is ready, and the governor and I will report on it at the Marine Board meeting. We have proposals and we will present them.

Vladimir Putin: Good, thanks. Ms Skrynnik (addressing Russian Minister of Agriculture), you took part in the latest round of talks on Russia's accession to the World Trade Organisation. What was the main result of our work with our partners, in your opinion?

Yelena Skrynnik: Mr Putin, the Russian delegation reaffirmed our previously declared position. This position was evaluated positively by ambassadors of the Cairns Group (which includes 19 countries) and by the delegation of the United States of America. The so-called "yellow basket" will keep the current level of $4.4 billion until 2017 and beyond. The Russian Federation will be able to increase the amount of this support in the next two years to $9 billion, with the subsequent gradual return to the current level that I have mentioned, according to the schedule, our schedule.

So the maximum level of government support for agriculture in Russia after joining the WTO will stand at $9 billion. There will be no decrease in the state support. All measures scheduled as part of the government programme will be fully implemented. They will stand at about $9 billion dollars by 2012, according to our data.

In addition, the government plans to partially change the ways in which government assistance is provided and increase financing of the "green basket" during the 2013-2017 five-year government programme we are currently working on under your instruction. This involves the social improvement of villages, the fertility of agricultural land, infrastructure projects, and the environment. So the volume of the "yellow basket" will have reached the current level of $4.4 billion by 2017. I would like to stress that this figure is not lower than what we have now.

So, all measures under our government programme will be implemented, and we will be able to produce competitive agricultural products.

Vladimir Putin: Mr Shuvalov, as we agreed, all restrictions we accept can be implemented only after we join this organisation. We discussed this issue many times. The restrictions will come in force only after we join the organisation, as this process can last indefinitely, imposing indefinite restrictions on us. And yet, during this time, we won't be able to enjoy the benefits of full membership in the organisation.

We do not approve of this situation, as we told our partners many times. I would like you to bear that in mind.

Igor Shuvalov: Mr Putin, this is what we are doing. All legislative acts passed by the State Duma stipulate that they will come into force only after the act on Russia's accession to the World Trade Organisation is ratified. Our partners understand our position. We proceed from this directive.

Vladimir Putin: As we agreed, there is one more element to consider. We have joined the Customs Union, established the Customs Union, and this process should move in tandem with our Customs Union partners.
Igor Shuvalov: This is what we are doing, Mr Putin.

Kazakhstan's consultations in Washington, their bilateral negotiations on Kazakhstan's accession to the WTO, recently came to an end. These consultations were held jointly, and the positions were coordinated. We have a uniform negotiation platform headed by Maxim Medvedkov, head of the department at the Ministry of Economic Development. We coordinate positions beforehand - whether these are bilateral or multilateral negotiations. Now Medvedkov works in Geneva, and we do this work by exchanging data and coordinating our positions.

Vladimir Putin: Does this concern Kazakhstan and Belarus?

Igor Shuvalov: Kazakhstan and Belarus are always together.

Vladimir Putin: Good, thank you.

I signed a government resolution mandating companies that manage blocks of flats to publish information about their business. Mr Kozak, your comments please.

Dmitry Kozak: Mr Prime Minister, this resolution gives us powerful leverage to increase the effectiveness of housing and utilities companies, eliminate any possibility of abuse and improve the quality of services. Business transparency is crucial for meeting these objectives.

Last December the government issued a resolution to set forth rules for publishing information about providers of utilities services, natural monopolies and their subsidiaries. Every consumer can now obtain information about the standards for services provided, costs included in the price of services and the technical possibility for connecting to a utilities network. So far 17,000 utility services providers have published information about their business on the internet or in official print media.

The resolutions we adopted are also critical for businesses because they need to know the prices for utility services and the cost of connecting to a utilities grid.

Ordinary people, the end users of utilities services, generally pay a managing company for them, not the service provider directly. This is why in accordance with the instructions to overhaul pricing policies in the industry that you made to solve the problems that several regions faced this spring the government set similar rules for managing companies to increase their efficiency.

In the summer changes were introduced to the Housing Code, giving the government the right to set such rules. A government resolution specifying information that managing companies must publish was signed on September 23.

This information includes the services provided by a company, their cost for one square metre, the price of services at which a managing company receives them from a utility services provider, financial reports, including annual plans for maintaining and repairing a particular block of flats and communal property in it, and information whether the services provided meet state quality standards and other standards in the industry. The resolution obligates each managing company to publish this information within two days from its entry into force.

Therefore, already this year people will be able to assess the effectiveness of each company competing for the right to manage their block of flats, see what services are provided and at what price and compare prices to make an informed choice of a managing company. We are doing our best to ensure that people can obtain thorough information and compare the prices of several companies.

I believe that this resolution will provide for the maximum transparency of each business in the utilities chain, creating an effective mechanism of public control.

Vladimir Putin: Good. We'll need to monitor how it will work in practice.

I have signed a government resolution to allocate additional subventions worth  4.6 billion roubles to single-industry towns. I'd like the Minister of Finance to comment on the mechanism for implementing this resolution.

Alexei Kudrin: Mr Prime Minister, this money will go toward single-industry towns to encourage selected projects for increasing employment and modernising the towns. These allocations will go toward specific programmes to improve the overall situation in these towns. I'd like to add that today we'll review one more issue at the meeting of the Government Presidium, the distribution of five billion roubles among 37 regions that have been affected by the drought.

Accordingly, the Ministry of Agriculture has identified the extent to which regions need these vital resources to counteract the effects of the drought in terms of the partial reimbursement of expenses incurred in planting and harvesting this year, as well as in supporting future sowing. Accordingly, today, the first five billion roubles of the 10 allocated will be used for this purpose.

Vladimir Putin: And when will these funds for single-industry cities be ready to be sent to the regions?

Alexei Kudrin: Right after today's meeting.

Vladimir Putin: Good. Mr Levitin, there is an across the board increase in traffic in Russia. What is your assessment of this? What volumes are we talking about? Which modes of transport have shown the most growth?

Igor Levitin: Mr Putin, colleagues, in the first eight months of this year, the biggest increase was in civil aviation: 28% compared with the same period last year. The international sector is also growing -18 million and domestic traffic - 20 million. In total - 38 million.

There is a 38% increase in freight traffic, and gives us an idea of Russia's transit potential. First of all, this is due to the fact that we have commissioned new runways. We recently commissioned a second runway in Novosibirsk, it is 3,600 metres long and meets requirements stipulated by the second category of the International Civil Aviation Organisation. So we now have the opportunity to provide transit flights for all types of aircraft from Europe to Southeast Asia.

I want also to report that there is growing traffic from Russia's Far East to the European part of the country and vice versa. As of September 25, 311,000 people bought subsidised transportation tickets. Last year this figure was only 116,000 , which means the increase in traffic from Russia's Far East has increased more than twofold.

In general, if we take stock of developments in civil aviation, then 2008 was the most successful year with 49.5 million passengers. We expect to exceed that figure this year.

Together with the Ministry of Economic Development and the Federal Antimonopoly Service we are monitoring ticket prices, as per your instructions.

Vladimir Putin: Please do so more assiduously. We need to be clear about the pricing structure.

Igor Levitin: We are working on it.

Vladimir Putin: What does it comprise?

Igor Levitin: We'll get back to you on that.

Vladimir Putin: Alright. I also signed a Government Resolution allocating an additional two billion roubles to support small and medium-sized businesses. These funds will be made available through the budgets of the constituent entities of the Russian Federation. Mrs Nabiullina, how you intend to dispense these resources?

Elvira Nabiullina: First of all, I wanted to say that this Resolution was prepared on your instructions, after a meeting with representatives of small and medium-sized companies - they raised this issue. Of course, this is a very important document. First, it allows an overall increase in support for small and medium-sized businesses, and this year, including that two billion, it will total 24 billion roubles, to be allocated from the federal budget. I want to remind that in 2009 this figure was a little over 18 billion roubles.

And secondly, we are, for the first time, taking a new approach to supporting the export activity of small and medium-sized companies. The ministry will distribute the funds across the regions directly to small and medium-sized companies in relation to five aspects of their activity.

The first involves interest rate subsidies on loans taken out to support export activity- a similar programme currently exists for large companies, but did not cover small ones - and half of the Central Bank refinancing rate will be subsidised.

The second area of activity involves covering the costs incurred by small companies participating in exhibitions abroad to promote their products.

I believe the third area of activity is also very important, and this is reimbursing costs incurred certifying goods that are shipped abroad.

And there are two other areas linked with helping small companies export their innovative products The first involves reimbursing the costs incurred through the patent protection process, in registering intellectual property rights abroad, to enable small companies to protect their inventions. And the second is reimbursing the costs incurred in creating designs for products destined for export.

The money will be distributed through those regions that offer up their programmes for consideration. They will defend them to the ministry. We expect to have completed that phase by the end of October. Then by the end of October small businesses in the regions will start to receive these funds.

At the same time, we are asking the regions to create export support centres. Many regions have already begun to do so - we estimate, 23 regions. But this infrastructure is not in place everywhere yet, and it definitely needs to be created so that we are actually able to fully exploit small companies' export potential.

In my opinion, this is a very promising endeavour. Compared with other countries - in Europe, Germany for example - exports by small companies make up half or even more of the overall export volume. And it has real potential to diversify our exports. 

Vladimir Putin: Good.

Today I have also signed all the documents needed for the draft budget for 2011 and the next two years to be submitted to the State Duma. This indicates that we have finished the essential, significant job of preparing the fundamental financial and economic document for next year. It was a complicated job. Something still remains to be done. Bu what we already accomplished was really a very involved job.

I would like to thank the Ministry of Finance. Mr Kudrin, I thank all your colleagues who worked on this. I know it was a huge job. I would also like to thank the Ministry of Economic Development and everyone else present here. Please pass my words of gratitude on to your subordinates who worked till midnight and even later. I know it was really strenuous work but it is not finished yet. Essential work remains to be done. In the near future we will have to engage the Duma, the United Russia party as the leading group in parliament, and representatives of other parties represented in parliament, in dialogue and prove that the priorities the government has specified really are critical vectors for our country's socio-economic development next year and for the two following years.

Let me remind you that this budget provides for a reduction in the budget deficit to 3.6%. At the beginning of last year, it never even crossed our minds that we could reach such a level. Nevertheless, this is the goal set in the draft law, and I would like to call on you not merely to stick to these parameters - which I hope Parliament will endorse - but to work to attain even better macroeconomic indicators. Budget expenditure incorporates another round of indexation across pensions, grants, maternity capital, which we have mentioned today, payments to servicemen, salaries for public-sector employees, as well as for the continued implementation of housing programmes and other government commitments to the people..

I stress in particular that this new budget will give a boost to two fundamentally new programmes - health service modernisation in the regions and large-scale road construction making use of the road funds.

I have already said, and I want to stress again, that these routine discussions should include all party groups represented in the Duma, and that we should attain consensus and acceptable compromise.

As far as today's agenda is concerned, let me pinpoint several essential items. First, we will discuss the Information Society draft programme, which brings together our e-government project and projects on using the internet in social and economic spheres, particularly in promoting small and medium-sized businesses, but also in other areas.

The Ministry of Telecommunications and Mass Communications will coordinate all work to integrate information technology in the day-to-day working of government agencies so as to obtain an effective fully-integrated system.

I place particular emphasis on the fact that this Information Society programme is, first of all, focussed on meeting people's needs, on creating new opportunities. I again stress that common people should be the main consumers of this service.

We must provide internet access to as many people as possible. People should be able to notice tangible improvements in public services, mainly due to the elimination of queues in government agencies as the overwhelming majority of public services will also be available online, cutting out those long journeys and waiting time.

We also intend to use IT to improve education and healthcare, with an emphasis on small towns and rural and remote areas. In short - the very places that today face the greatest problems in the quality of, and access to social services.

Indeed, the Information Society programme will promote economic modernisation and broaden the horizon for businesses.

The next item on our agenda concerns a law drawn up by the Ministry of Transport on mandatory accident insurance to protect passengers. I remind you that special amendments to the Air Code, made at the end of 2007, guarantee air-travellers adequate reimbursement of damage to their life or property. Accordingly, the families of plane crash victims are entitled to two million roubles in compensation. We all fully realise that money cannot compensate a tragedy of that magnitude but people who find themselves in such tragic circumstances should be aware that the state support is there for them.

The draft law proposes extending mandatory insurance to all forms of transport: the railways, ships, buses, the metro, everything in order to protect passengers' interests and to provide additional incentives for corporate investment in enhancing transport safety.

I emphasise that the introduction of mandatory insurance must not cause any fare increase. Transport companies currently levy various dues on passengers. However, usually only token sums are paid on insurance while the procedure for allocating the money is greatly lacking in transparency and is extremely difficult for the beneficiaries. At some times, the whole process looks ridiculous. The passing of this law should put an end to such situations.

Third. Today we will pass a decision on additional support for agricultural producers, primarily those hit by the drought, as we have said here already. As we know, the total amount offered in various emergency aid packages to the countryside is already in the region of 40 billion roubles this year. Of this sum, 15 billion has already been transferred to the regions. Proposals have been drawn up now on the distribution of another five billion among drought-affected areas.

However, information is reaching the government from the field that it is taking too long for the money to reach the farms, and that some of them have not received anything so far. That is why I am asking the Ministry of Finance to check these transfers to regional budgets and, with the Ministry of Agriculture, to track down these farm transfers. I would like you to report back with the results every week.

I want to draw your attention to another subject, the draft programme for the patriotic education of Russian citizens. I consider this to be a very important matter. It involves our national heritage, our country's history that relates to every single Russian family. The younger generation should not only be keeping abreast with current events but also need to have a sound understanding of our traditions and of our history, with all its tragedy and heroism. We must support educational projects, historical research, the publication of archival documents, military patriotic clubs and societies searching forgotten soldier's graves - in short, cultural, sporting and creative initiatives to help people achieve a sense of self-fulfilment and enable them to feel that they are inalienably part of this nation.

These are the priorities of the proposed programme. The federal budget will allocate 600 million roubles towards its implementation plus another 180 million from extra-budgetary sources. We will discuss this programme today and, I hope, endorse it.

Let us get down to work.