as for the Rostov region, the Governor Vasily Golubev has signed the decree on austerity. The regional government identified priority expenditures of the regional budget in the second quarter. We also learned about plans to cancel its planned acquisitions.
As explained in the press service of the Governor, the regional budget was formed in the conditions of favourable economic development. But after the situation has changed, there is a need to adjust expenses, protecting the most important articles. It is already named the potential damage that would be incurred by the region.
“We are considering our options in this situation. Only according to preliminary estimates, losses of the budget of the Rostov region in 2020 could be from 17 to 20 billion rubles”, – said Vasily Golubev.
it is Already known that the priority of budget spending and the protected article includes, for example, salary, social support, employment and obligatory medical insurance of unemployed residents of the area. It is also noted that the regional budget will continue to fulfil the commitments in the road and transport industries. In addition, continue to Finance national projects, as well as those activities for which funds come from the Federal budget.
At the same time is canceled or postponed to a later date the majority of public procurement, which are not associated with the implementation of anti-crisis measures.
Apparently, the economy mode will affect not only the regional budget. Heads of municipalities encouraged to adopt similar anti-crisis measures.
Vladimir Klimanov, Director of Institute for regional policy, Ranepa:
Less than two months ago, the budget of the Rostov region have been revised upwards. The volume of transfers from the Federal budget have not changed.
apparently, 2019 and was completed with turning the remnants of that they decided to include this year, and therefore increased expenditure in various directions.
Here we have this fiscal practice. In February, the local authorities took the decision in the direction of increasing the coffers, but now will reduce the expenditure base.
From what can be discarded? As a rule, these are projects that go beyond this fiscal year, they can be postponed until better times, they will have no effect now. We are talking about long-term investments, all kinds of public procurement, which are associated with indirect actions of the authorities. For example, the purchasing research work is always cut. It is easy to abandon spending on international activities of the authorities.
However, as you can see from the document, the Rostov authorities have maintained spending on video surveillance cameras and current expenditure servicewould the operation of administrative buildings of the government.
Now the situation is repeated in 2009, when we increased spending to a greater extent because of social obligations, and the income should be reduced. Meanwhile, the budget of the Rostov region adopted to limit deficits. With such a sharp drop in income in the Rostov region will be difficult to borrow to compensate for this difference.
And the maneuver is no, unless you count on the intergovernmental transfers from the Federal budget. Because it themselves to mobilize revenues is simply nowhere. Because more than 90 percent of revenues to the local Treasury provides income and personal income tax on profits. Both of this year is expected to decline because of the crisis.
I’m pretty sure that not only in the Rostov region, which is “middling”, but in the other subjects of the Russian Federation will review the budgets.
meanwhile, the regions that are heavily dependent on intergovernmental transfers, will suffer not strongly. They have a drop in income not significantly so in the overall budget. If the budget of Ingushetia 90 percent consists of grants and subsidies, even if he loses the other 10, for Republic nothing critical will happen.
However, this year for anything positive I do not expect. They only have three main sources of revenue: intergovernmental transfers, income tax and personal income tax. The decline in income is obvious. Expenses increased due to social obligations. You have to rely on additional transfers. But you need to understand where they appear in the Federal Treasury.
Recently adopted one of the anti-crisis laws, which made amendments to the budget code and the law on execution of the Federal budget in 2020. Regions were given the opportunity to defer repayment of budget loans, which on the first of March amounted to nearly a trillion rubles. For comparison, all the anti-crisis measures of the government which are now being implemented, will require a cost from the Federal budget to 1.4 trillion rubles.
Perhaps, could be consolidated to go to the cancellation, and not on the extension or installments to remove formal restrictions. To remove the financial burden at least on the public debt, when almost all regions (78 subjects) tied by budget loans. But there is a risk that, after receiving a pardon on the old loans, regions may incur new debt obligations.
by the Way, in the European Union on 23 March lifted restrictions on the marginal size of the national debt and limit the amount of the deficit for the member countries of the Eurozone. This was done for the first time in history, because they do not fit in the parameters of the budget policy that was before the crisis.
And we also have innovation. In the framework of anti-crisis laws were adopted upper limits for regions in the budget code – they ��nyali with amount that are of a crisis nature. For example, if there are additional payments to doctors in respect of subsidies to the region, and they get out for limits of a deficit, then this restriction will be removed.
the crisis would have an impact on all the constituent entities of the Russian Federation. The donor regions at least have room to maneuver, due to the available excess painless they can from something to give.
For heavily subsidized territories, nothing has really changed, will continue their dependence on Federal transfers, which do not fall under the reduction. Most painful crisis may hit, as I said, on “average performance”, such as Rostov, Saratov, Novosibirsk region, Altai Krai, etc.
But while the peak of the pandemic coronavirus in our country fails, it will be difficult to make forecasts.
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