‘Budget deficit of 27 billion is quite a lot. How are we going to finance it? At what expense?’

3 fundamental tasks

Immediately after the announcement of the presidential address, the first reading of the draft law on the budget of the republic for 2023 and the planning period of 2024 and 2025 took place. For the first time since its preparation, the main financial document has been discussed in the direct presence of Tatarstan President Rustam Minnikhanov. The first hearings were held by Speaker of the State Council Farid Mukhametshin. As the discussion progressed, he repeatedly said that there was no need to worry too much, since significant changes to the budget could be made after the first reading. Probably, this slightly weakened the fighting spirit of the parliamentarians.

Presenting the forecast of socio-economic development of the Republic of Tatarstan, head of the Ministry of Economy Midhat Shagiakhmetov said that the republic remained stable. According to him, GRP will be 100% by the end of 2022 compared to last year's level, and by the end of 2023 — a near-zero growth of 100,7% is planned. The consolidated budget of the republic is projected as follows: revenues — 394,4 billion rubles, expenses — 421,5 billion rubles, deficit — 27,1 billion rubles, Minister of Finance of the Republic of Tatarstan Radik Gayzatullin reminded in turn.

The budget of 2023 faces three fundamental tasks of budgetary policy, explained the head of the budget committee, Leonid Yakunin. The first is the balance and stability of the budget system. The second is the fulfillment of social obligations. The third is the execution of national projects and state programmes. In his opinion, the deficit of 27,1 billion rubles is within the maximum permissible limits.

Next year, Russia provides for the preservation of existing tax benefits, the introduction of new tax regimes, but a new procedure for paying tax payments is also being introduced, Yakunin noted.

“In the coming three-year period, we need to be ready for large-scale cost optimisation, taking into account the current sanctions restrictions and the formation of our own sources of income," he warned.

At the same time, the speaker assured that social spending has been increased to 80%.

“Surcharges to pensions, travel expenses, housing and communal services, drug provision have been increased. An annual increase in salaries for medical, pedagogical, social workers, as well as researchers and cultural workers has been laid down," Leonid Yakunin said. They talked about an increase in the wages of public sector employees within 10%.

More money to reserve fund of Tatarstan's president

“And yet the deficit of 27 billion is quite a lot. How are we going to finance it? At the expense of what?" Deputy of the State Council of the Republic of Tatarstan Ilshat Aminov asked.

“There are two sources here: own account balances, and the second is to attract loans from the federal budget, if there is such an opportunity," Leonid Yakunin replied. They tried to find out the scale of the upcoming cost optimisation from him, but there was no clear answer.

In turn, the head of the budget committee came up with a new initiative. He proposed to reserve more budget funds in the reserve fund of the president of the Republic of Tatarstan.

“There were a lot of questions about the mobilsation of citizens, their social and financial support," he recalled the recent emotional speeches of fellow deputies dissatisfied with the formalisation of assistance to the mobilised. “In my opinion, for this it is necessary to provide for an increase in the reserve fund of the government.

According to him, today it has accumulated 6,7 billion rubles for 2023, which is below the legally permitted level of 3%. But it has become known that this norm has been suspended.

“That is, it is possible to exceed 3%," he hinted.

But it remains unclear whether this will be followed by a local redrawing of the budget.

“Japanese question”: why not Chinese yuan?

MP Nikolay Rybushkin asked how the financial market would develop in the absence of foreign capital: “At the expense of what will they develop — at the expense of internal investments, if we do not have external ones?"

“It is wrong to say that there will be no external ones," the head of the Ministry of Economy, Midkhat Shagiakhmetov, objected to him.

According to him, the bet is placed on partners from friendly countries, on attracting financing according to the rules of Sharia. He said that State Duma deputies were being in Kazan that day, with whom amendments to federal legislation would be discussed.

After that, Rybushkin asked an unexpected question: “Do we have relations with Japan?" The question had a reason. Later, the deputy asked why the debt obligations of the republic's budget were in yen. But the minister of economy did not catch the hidden subtext of the “Japanese question” and gave him a formal answer. After about 15 minutes, Rybushkin returned to this topic again.

“We found out that Japan is an unfriendly country to us. When I read the budget, I saw (debt) calculations in yen. Why not in drachmas? Why, for example, not in Chinese yuan?" Nikolay Rybushkin spoke from the seat with some pathos.

Perhaps, this was the only moment to which the president of the Republic of Tatarstan reacted.

“This debt is secured by the obligations of KAMAZ," Rustam Minnikhanov took the floor.

He explained that part of the debt is due to guarantees in Japanese yen, which were provided to KAMAZ in 2005 for obligations to the federal budget.

“There are no questions at all, it's just technically. We simply cannot get away from this, we have raised this issue," the president said.

That is, despite the sanctions, the Japanese debt remains on KAMAZ.

“Well done, you've looked scrupulously. In order to reach the Japanese yen, one needs to read the budget well," Rustam Minnikhanov remarked with a slight irony.

Let us remind that the state debt of Tatarstan fell to 93 billion rubles at the beginning of August, and the share of budget loans, at the same time, increased to 95%, the rest of the debt falls on guarantees in Japanese yen, which were provided to KAMAZ in 2005 for obligations to the federal budget.