• by IPS Correspondents (moscow)
• Friday, November 25, 1994
• Inter Press Service

MOSCOW, Nov 25 (IPS) - On the first reading of Russia's draft 1995 budget in parliament Friday, lawmakers have shown a readiness to use their votes as a political weapon and challenge the government by stalling adoption of the fiscal blueprint.

Basic disagreements exist over the government's income and expenditure plans for the next year which lawmakers say are unrealistic and will damage the economy.

Massive cuts in state funds to heavy industry, agriculture and regional administrations are envisaged to put tight curbs on government spending.

Yevgeny Yasin, recently-appointed economics minister, said: "It is high time to cut expenditure. This will not result in a substantial production fall though it may increase unemployment."

According to the draft budget, state revenues will total 755 trillion roubles (one dollar is 3,220 roubles) while outlays are estimated at 826 trillion roubles, leaving a gap of 77 trillion roubles which is to be bridged through the issue of government securities, foreign investment and international credits.

Credit flows from the Russian central bank are to be severely slashed in an attempt to bring monthly inflation rates to 1.5 percent by the end of 1995, down from the current average of eight percent.

Lawmakers say the revenue estimates and inflation projections are fanciful and will probably withhold their approval, which president Boris Yeltsin can circumvent by simply dismissing parliament.

Mikhail Zadornov, head of the Duma committee on budget, taxes and finance Mikhail Zadornov has said that in its present form the draft budget will fail within two months of its approval since the optimistic forecasts have no relation to the reality.

He claims that pressure to release government funds for salaries, pensions, allocations to the cash-starved defence sector and other necessary outlays will force the government to loosen its pursestring with an inevitable default in the tight monetary controls which have been envisaged.

Yeltsin will chair a major conference to be held in the Kremlin on Saturday to be attended by top officials with representatives from parliament, Russian regions, state industries and private business.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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