OREANDA-NEWS. July 29, 2009. Vladimir Putin's introductory remarks: Good afternoon, colleagues,

Tomorrow at the Government's meeting, we are to review the main directions of budget policy for 2010-2012. However, in line with the established procedure, we must first discuss its key aspects within the framework of the Budget Commission. In this context, I would like to remind you of the basic principles, which underlie the current budget planning.

In 2010, we intend to improve, albeit modestly, the main macroeconomic indicators, achieve a positive growth of the GDP, industrial production, and agriculture, as well as stabilise real incomes of the population. In a word, we are planning to switch to post-crisis development.

Nevertheless, the negative consequences of the economic downturn will continue affecting federal funds for some time to come. The budget in 2010 and in a number of subsequent years will have a deficit.

By virtue of this, we must correctly assess our possibilities with due account of the money accumulated in the Reserve Fund and the National Welfare Fund, as well as the prospects of domestic and foreign borrowings. We will have to establish a tough system of priorities, giving up on secondary or less urgent items of expenditure.

At the same time, as I have already said more than once, simple mechanical slashing of budget expenses is not a way out either. By doing this, we may leave the economy without indispensable investment, and impede the fully-fledged recovery of economic business activities. Therefore, in the draft budget for 2010, we must find an optimal balance for resolving simultaneously a whole number of objectives.

First, we must secure the improvement of living standards for the senior generation and modernise our pension system. As you know, a considerable sum of more than 600 billion roubles has been appropriated for these purposes.

Unconditional fulfilment of the state's major social commitments falls into the same category. I'm referring to the payment of the maternity capital and other allowances, implementation of the National Health Project, and provision of housing to army servicemen, to name but a few.

Second, we must actively continue using the instruments of enhancing demand for domestic products, which have proved their worth, such as leasing, subsidies for interest rates on loans, and support of exports.

Third, we should not forget about the goals of long-term development, programmes for modernising the infrastructure, and support for the high-tech industries. As you know, only yesterday we had a general discussion on supercomputer technology at the Security Council.

It goes without saying that all undertakings and projects associated with the priorities I have mentioned should be scrutinised in terms of their effectiveness, as well as justified appropriation of funds for their implementation.

We must substantially improve the management of federal funds in order to carry out our social commitments, preserve macroeconomic stability, and keep the budget deficit at the acceptable level.

I would like to emphasise once again that observance of macroeconomic parameters is very high on our list of priorities, and we will do all we can to achieve this.

Today, we must sum up the results of what we have done. As I said before, at the Government's meeting tomorrow we are to endorse the basic parameters of the budget for 2010 and the planned period until 2012.