President Vladimir Putin met with Russian Government members

President of Russia Vladimir Putin had a meeting with Russian Government members.

Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev and Deputy Prime Minister Dmitry Kozak prior to the meeting with Russian Government members.

President of Russia Vladimir Putin:

Good afternoon, colleagues.

Today we will primarily discuss the budget, because work on it is wrapping up and the draft will be submitted to the Russian State Duma soon. I will give you more details in a minute.

But I would like to first address the situation around VIM - Avia airline. Yesterday, I spoke with the Transport Minister about this. Mr. Sokolov told me that the company had fully met the requirements for airline companies. He knows my response, I do not want to repeat myself. I will only repeat one thing. If you developed criteria, what good do they do if you cannot see the actual situation behind them? What kind of criteria are these? A company may meet all requirements and still not be able to operate.


Tens of thousands of people, tens of thousands found themselves in a very difficult situation. I would understand if it was the first time but similar cases occur year after year. And we are still unable to develop functional and efficient legal regulation.

I understand very well that we want to create adequate conditions for businesses without the excessive burden of additional costs related to various forms of protecting people’s interests, insurance and so forth. But it is not possible to run a normal business without them. After all, business is not for business people but for the customers.

By the way, the same is taking place in construction. We have been endlessly talking about housing equity holders and so what? We are investing funds, of course, and remedying some payments – many but not all – but the problem is still there. And now law-enforcement agencies report that apart from this predicament of so-to-speak official housing equity holders, there is also a different problem linked with illegal construction. This problem is many times larger than that of housing equity holders. Some companies are building housing on sites that have not been properly registered, and people have absolutely no idea where to go and whom to contact. Yes, of course, I understand that without the use of private funds this business would not have been as effective as it is now. We know about the problems facing the construction industry. Everything is clear. But why are we still unable to regulate properly the normal, civilized functioning of these vital economic sectors?

I have just discussed this with the Prime Minister, and I would like to draw the attention of the Deputy Prime Minister in charge of transport to this issue: you do not pay enough attention to this sector. Not enough. Maybe you are overloaded? We have already spoken about this.

Chief of Staff of the Presidential Executive Office Anton Vaino and First Deputy Chief of Staff of the Presidential Executive Office Sergei Kirienko prior to the meeting with Government members.

And I want to tell the Minister that this is a reprimand for incompetent performance. If you cope with this problem quickly and successfully, Dmitry Medvedev and I will think about what to do about this incompetent performance. If you fail, we will think about that as well. Please resolve this problem quickly and effectively, and not only resolve it but also submit proposals on settling this situation in general, intensifying the legal regulation of this sector and enhancing responsibility of carriers. It is necessary to monitor the implementation of norms, requirements and standards. They must be effective, understandable and transparent.

I do not want to repeat anything, I have a reference here. I do not want to talk about this issue anymore. You know everything yourself, please work more actively in this regard.Today I would like to focus in more detail on the issue I just mentioned at the start of our meeting, I mean the draft federal budget which is to be submitted to the State Duma this week, the budget for 2018–2020. I have to say that a lot of complicated work has been done. The main financial document of the country was prepared at a time when the national economy is only beginning to move into a period of steady growth. That naturally imposes certain constraints, above all those connected with the national treasury revenues.

I have to note that like in previous years, we managed to stick to a responsible approach in the planning of public spending and ensure the overall balance of the federal budget and address the main priorities of the country’s development. These are support of the economy and the development of infrastructure, strengthening national security and defense capabilities and, of course, meeting the social obligations of the state to its citizens, investment in education and healthcare, support of science and culture.

Ahead lies close joint work with parliament. Together with the State Duma deputies we will have to go over every budget item. I repeat, I am aware that resources are limited. We all know it only too well, but still I urge you to see if there are untapped reserves for supporting key sectors of the economy, for solving the tasks of raising living standards, developing cities and communities. I would like to note that all these topics have been discussed repeatedly in various formats and at various meetings.

One of the key areas of the economic part of the budget is support for agriculture. Over the past several years this sector has registered robust growth rates and a bumper grain harvest is expected this year. We have to maintain the positive dynamics in agriculture and stimulate the continued development of domestic producers. Of course it is necessary to raise the rural living standards, to build new social infrastructure facilities, create modern comfortable conditions for work and recreation. Again, we have discussed this at various meetings in my office and I know you have discussed it with the Prime Minister. I urge you to allocate an additional 20 billion rubles every year over the next three years for the development of agriculture and the social sphere. We have discussed this topic, and there are such opportunities. I want you to keep it in mind

We have to carry on the urban improvement program in cities. If you remember, we discussed it at the meeting of the Council for Local Self-Government in Kirov on August 5. Questions were raised as to what amounts of financing were needed. We are talking about creating a modern urban environment, creating public gardens, museums, recreation places, as well as about additional support for such projects in small and historical towns, which is particularly important for safeguarding our national memory. This program has just got under way, and it is working effectively. I am requesting more federal funds to finance these areas of activity.

We have to plan a large-scale ecological program to save the River Volga. We have to repair the harm inflicted on the ecosystem of that river and ensure prudent use of the Volga’s resources. I would like to stress that this is a very important and sensitive topic for tens of millions of our citizens. This topic has also been discussed more than once in various formats, and I urge you to remember it and address all these needs in the budget.

Deputy Prime Minister Olga Golodets prior to the meeting with Government members.

Finally, one more question. It has to do with culture, grant support, the financing of creative groups and cultural institutions. We have to work out a uniform approach to indexing such grants, and they have not been adjusted for quite some time. It is not such a large amount of money. I urge you to take that into account.

Russian Government in preparing the budget worked very intensively on every aspect. I would just like you to remember some things I consider sensitive. Let us discuss all these topics. And not only those I have mentioned, but broader, global issues that you dealt with in preparing the budget.

Mr. Siluanov has the floor.

Finance Minister Anton Siluanov:

Thank you Mr. President.

Russian Government has completed the drafting of the budget. In drafting this document we sought to solve several tasks.

The first is to support the economic growth which began late last year, and we see good rates exceeding the forecasts. For next year we put interest rate cuts into the budget parameters, which is to say the cost of loans to entrepreneurs, and this translates into a corresponding boost in investment activity. We are expecting real investments to grow next year which would actually be one of the foundations for increasing sources of economic growth.

The second goal. We have drafted the budget assuming we will meet our obligations regardless of the conditions of external markets. We have assumed a fairly conservative oil price of $40 per barrel, a decrease of the oil and gas budget deficit to below six percent in 2019–2020 and around 7 percent in the following year. We are also taking into account the meeting of our obligations via those parameters, independent of what happens with the external restrictions.

We expect the budget deficit to decrease from 2.2 percent of GDP this year to 1.4 percent next year, and below one percent in subsequent years. What does this give us? It gives stability to the budget, resilience of the budget structure to different external factors which used to significantly impact budget performance. We do not need to cut expenses, we do not need to reconsider our programs next year.

The second task is meeting all the social obligations specified in the May 2012 Executive Orders, primarily on government workers’ wages. The funds for that have been allocated in full. Starting in 2018, the provision of the Order on increasing wages to government workers will be fulfilled in full. We are confident that there will be a corresponding increase in the quality of services.

We have envisioned wage growth in budget-funded sphere, which makes it possible to predict that wages will grow in the whole economy. According to forecasts, real wages will grow 4.1 percent next year, in part thanks to our increase of wages and benefits in the budget-funded sector.

The next point I would like to make is the consolidation of next year’s budget structure. What does this mean? 64 percent of total federal budget revenues now come from non-oil and gas revenues that are not linked with short-term factors. Remember that some time ago everything was the other way round. The bigger part of budget revenues depended on short-term factors, creating risks during implementation of the budget.

Both this year and next year we will continue carrying out all measures aimed at improving tax collection and administration without increasing the tax burden. We have planned measures to merge the data bases of the Federal Taxation Service and the Federal Customs Service. They are increasingly integrating their systems to improve fiscal performance. We will introduce systems for product traceability as well as markers. Cash register equipment will be installed in accordance with our timetables. All these measures will provide additional revenues to the treasury, which are accounted for in next year’s budget. Let me repeat once again that this will be done without increasing the tax burden for responsible taxpayers.

Our draft budget also provides for improving the quality of expenditures, which will increasingly take the form of priority projects that differ from state programs in that they fix the indicators for the implementation of these projects. Their number is limited as distinct from state programs when there were 2,500 key indicators for 40 state programs. Naturally, it is impossible to monitor all of them, whereas priority projects will have a limited number of such indicators. We in the Government are regularly monitoring the implementation of these projects and holding accountable those in charge of implementation. More and more spending on such projects will be or already has been reflected in the draft budget for 2018–2020.

Importantly, there will be a qualitative change in inter-budget relations starting next year. In accordance with your instruction, Mr. Putin, we factored in budget loan refinancing for the regions of the Russian Federation. On the one hand, this will considerably alleviate their debt burden. We have already met with governors at the session of the regional development commission in the Government of the Russian Federation. We discussed the issue in detail and explained how this will be done. This is the first point.

Secondly, we are substantially changing the system of inter-budget transfers. For the next three years we are allocating a large part of funds with due account of the assessments, the so-called model budgets of the Russian regions that we are drafting by assessing their spending commitments. The Government of the Russian Federation has carried out this work and this will make fairer the distribution of inter-budget transfers.

In general, we have envisaged incentives for the regions – grants that will be given to those regions of the Russian Federation that achieve the best results in economic growth, attracting investment and increasing their own budget revenues.

On the whole, next year the structure of federal budget expenditures will be based on the priority of the social sphere: 36.4 percent of spending will go to the social sphere, 29 percent to defense and security and about 15 percent to support for the economy. Social spending will be higher than in the previous budgets. We believe this is an absolutely correct re-orientation of spending toward the human capital that is producing immediate returns and contributing to economic development.

Mr. Putin, we have already started working with MPs. In July we held parliamentary hearings on budget policy for the next three years. Next week we will conduct parliamentary hearings on the draft budget in the Federation Council. I am sure we will make a joint decision with MPs during the discussion and probably certain revisions of the draft budget in the parliament of the Russian Federation. I hope MPs will support us. The policy that we discussed (in fact, it was supported) will now be expressed in specific figures and programs. I am sure that MPs will back us. Thank you.

Vladimir Putin:

Thank you.

Since much has been done and, as always, such work is the result of compromise, I would like to ask heads of relevant departments to speak during debates in parliament as one team, to represent the interests of the entire Government rather than their sectoral interests. The interests of the Russian Government as a whole are expressed in the draft budget. Obviously, it is impossible to meet the interests of everyone in everything. This is understandable and natural but we must proceed from the premise that the budget is a uniform balanced document. I would like to ask you to treat it as such.

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Russian President met with Government members.

Vladimir Putin held a meeting with Government members.

Vladimir Putin - President of the Russian Federation.

President of Russia Vladimir Putin:

Good afternoon colleagues.

Today, we will discuss an issue of great importance for practically every Russian family – how we can use information technology to improve access to medical care and medicines.

But first, I would like to ask Mr. Manturov to say a few words about how the INNOPROM exhibition is proceeding. We saw its start recently. How are things now?

Minister of Trade and Industry Denis Manturov:

Mr. President, let me begin by thanking you, on behalf of all Russian industry, for taking part in this event.

This exhibition has become Russia’s principle industrial forum. Digitalization in industry was the main theme of this year’s event and we had a large number of IT companies taking part, even more than from manufacturing sectors. This shows that digitalization is taking place in all economic sectors without exception and in industry as well, of course.

More than 650 companies took part in the exhibition. This year, we had a record number of visitors – more than 50,000 people from 98 countries.

Next year, South Korea will have the status of partner country for the event. We plan to expand the exhibition space and we hope that this will attract new companies. This is also a good rehearsal for Yekaterinburg’s bid to host EXPO-2025. The bid is built around the theme of accessible innovation for our children and future generations.

We are counting on support from you and Mr. Medvedev. We will soon establish an organizing committee and appoint a chairperson. Given our country’s experience in organizing and hosting big events, I am certain that we can do an excellent job of hosting EXPO-2025 in Yekaterinburg.

Vladimir Putin with Government members.

Vladimir Putin:

Who else is bidding – Osaka and Paris?

Denis Manturov:

Osaka, Paris and Baku.

Vladimir Putin:

Well, you will have to work at it.

Denis Manturov:

We will do our best.

Vladimir Putin:

We have launched additional programs for car loans at preferential rates, starting July 11. Could you give us a bit more detail on this, please?

Vladimir Putin at a meeting with Government members.

Denis Manturov:

Yes, Mr. President. Since the beginning of this year, we have been carrying out a whole range of measures to support the automotive industry. As planned, starting on July 11, we launched five new programs for car loans. We have the First Car and Family Car programs (these groups of buyers will be eligible for an additional discount of up to 10 percent). Then there are similar programs for preferential vehicle leasing, Russian Truck, Russian Farmer, and My Business. These three programs aim primarily at small and medium businesses. We have raised the discount on the first payment from 10 to 12.5 percent of the vehicle’s cost.

We hope that these programs will make it possible to sell more Russian-made vehicles, at least 85,000 by the end of the year. Overall, the different programs in this sector aim to ensure production of around 670,000 vehicles by the end of the year.

So far, everything is going to plan. More than 360,000 Russian-made vehicles have already been produced and sold with state support.

Vladimir Putin:

Good. You can make a detailed analysis of the program’s results later.

In 2011, we abolished licenses for some types of road transportation, including bus transportation, and since then we have seen a steadily growing number of accidents involving buses. The first half of this year saw a significant increase in accidents even compared to last year. What is your assessment of the situation and what do you think we need to do right now? Mr. Sokolov, you have the floor.

Transport Minister Maxim Sokolov:

Mr. President,

It is true, overall, the number of road accidents has decreased, but the situation with bus transportation darkens the picture. Over the first half of 2017, accidents were up nearly 1.5-fold compared to the previous period.

In 2015, we adopted the Federal Law on organizing regular road and municipal electric-powered vehicle passenger and baggage transportation. This law was a contributing factor to bringing down the number of accidents caused by driver error on regular bus routes by 13 percent. This was the case for regular routes, but for irregular bus services, we see that the number of accidents during transportation for personal or professional needs has increased by 63 percent. Of particular concern here is the fact that 40 percent of these road accidents are committed by people who do not have a business status, in other words, uncertified individuals rather than organizations professionally involved in passenger transportation.

This year, unfortunately, several headline-making road accidents have already taken place, in Trans-Baikal Territory and Tatarstan, for example. We responded immediately. In mid-June at the Transport Ministry and on July 13 at the Interior Ministry, together with [transport safety supervisory body] Rostransnadzor, we had telephone conferences with the heads of all regions and gave instructions to take urgent measures to reduce the number of passenger transport accidents on our roads.

Last year, the Interior Ministry and Rostransnadzor identified more than 1000 illegal transport service providers, opened 26 criminal cases for unlawful business activity, and 500 criminal cases for providing services that do not meet safety demands. Nevertheless, we think this is not enough.

You noted quite rightly that since 2011, when passenger transportation licensing for chartered transport or personal needs was abolished, there has been a steady increase in the number of accidents in this sector. To address this issue, the Transport Ministry has drafted and submitted to the Government a draft federal law making the relevant amendments to the current law on licensing and restoring licenses for all types of road passenger transport vehicles equipped for the transportation of eight or more people. This draft law is currently going through expert evaluation. We think that it will ensure the same conditions for all bus drivers and shippers carrying out regular, irregular, charter transportation and transportation for personal needs.

Also pursuant to your instructions, the Ministry of Transport has drafted a federal law amending the law on road safety, which establishes uniform traffic safety requirements for commercial carriers. We now have the same requirements for legal entities and individuals with regard to mounting tachographs on vehicles. Currently, if a bus is owned by an individual, installing a tachograph is not mandatory, since the number of working hours is not an issue in this case. However, we believe this does not make sense, because the safety of passengers depends on this, and it does not matter which bus gets into an accident, whether it is owned by an individual or a legal entity, that is, an organization.

This draft law was adopted by the State Duma in the first reading in late 2016. Mr. President, we would like you to issue a directive to have the second and the third readings held as soon as possible, so that the draft becomes law and this requirement comes into force.

Speaking about tachographs, many accidents are caused by drivers either falling asleep or getting distracted at the wheel. Over 550,000 buses have been equipped with tachographs and over 23,000 controller cards have been issued. All regions now have the corresponding infrastructure to install and maintain such tachographs. There are over 500 service points accepting tachograph card applications. If we see this system through to its logical completion, and all carriers start using them, then, according to experts, this will reduce the number of accidents involving buses by at least 15 percent.

Vladimir Putin:

At INNOPROM, we saw various modern, comfortable, and efficient devices that monitor the physical condition of drivers. Of course, the issue is about cost and implementation, but, of course, we must follow this path. Look at what is available there.

Maxim Sokolov:

Yes, that is true, Mr. President. Safety comes at a cost, but it is worth paying special attention to this issue, and we are willing to develop an appropriate regulatory framework, which would make such devices mandatory for all those who engage in commercial passenger operations.

Vladimir Putin:

Mr. Gorovoy, do you have anything to add?

First Deputy Interior Minister Alexander Gorovoy:

Mr. President, the Interior Ministry and the Transport Ministry were involved in drafting these federal laws. The statistics show a need, in our opinion, in passing these laws.

I can provide two relevant figures. Four of the last seven accidents involving buses were caused by drivers falling asleep at the wheel. I am not anticipating or announcing the results of the investigations; this is a preliminary picture of what we found at the accident scenes. The second figure is that of the 115 passengers who died because of bus drivers’ errors, 39 were killed at the moment when we think the drivers fell asleep.

I am fully aware that these draft laws will give us an additional tool, but at the same time, I realize the responsibility for prevention and better results of our oversight activity.

On July 13, together with the heads of the regional road safety commissions and Rostransnadzor, we had a telephone conference with all regions. In the meantime, waiting for these laws to come into effect, if they are passed, we are taking the necessary measures. We have coordinated our posts and teams with bus routes and abolished the order the Interior Ministry issued five years ago prohibiting us from stopping vehicles outside of stationary posts. Our country’s geography and transportation logistics show that this was a mistake on our part when we drafted those laws. If there are violations to rules on working hours and rest time, passenger buses, including and primarily chartered ones, will be stopped and drivers will be given a chance to rest.

We foresee some negative feedback from passengers, but after working a month under the new rules, I believe we will be able to encourage all businesses to follow the demands of Transport Ministry regulation 25 concerning drivers’ work-rest routine.

I would like to note that in Moscow alone we have 2,300 buses coming into the city, carrying out charter passenger transportation. They are not subject to any checks by dispatchers, and passengers board the buses outside the city’s bus stations. We have turned to Rostransnadzor and by August 15, we will inspect the implementation of Federal Law 220 on organizing passenger transportation and will provide consolidated information to the Prosecutor General’s Office and the regional prosecutors’ offices.

The school year is approaching, and we have 19,400 schools around the country organizing school bus transportation with a fleet of 22,500 buses. We will inspect these buses and drivers as well. Once again, Mr President, we are aware of our responsibility and we will focus efforts on addressing this sad increase by 21 percent in the number of passengers killed as a result of bus drivers’ errors.

This ends my report.

Vladimir Putin:

Fine.

We will return to this issue some time later. For now, please tell me how things are going.

This year the weather has not been good for rural residents. In this context, here is a question to Mr. Tkachev: how is harvesting progressing?

Minister of Agriculture Alexander Tkachev:

Mr. President, colleagues,

A few words about the harvest. Low temperatures in a number of regions delayed harvesting by two weeks. However, farmers are actively taking in the harvest from fields. They have collected the first 20 million tons. This is a bit less than by the same time last year – 20 percent less. Nonetheless, the results in the south (Rostov, Kuban, and Stavropol, where I was yesterday) show that the crop yield will be higher and the quality of grain is fairly good.

So far, crop failure has been minimal although bad weather made it difficult to work in the fields almost in all regions. The south of Russia and the Volga area were hit by heavy rain, frost and hail. Soil is waterlogged throughout Central Russia. The rates of field work have slowed down beyond the Urals, in Siberia and the Far East due to floods and waterlogging.

The only threat we are facing today is that the bad weather will last through autumn, in which case it will be difficult to take in the crop. If it is fairly dry in autumn – September and October are vital for the Urals and Siberia – we can hope to harvest more than 105 million tons of grain this year. This is less than last year but enough for domestic consumption – about 70 million tons, including 20 million tons of food, 40 million tons of fodder, and 10 million tons of seeds. Another 35 million tons may be used for export.

We expect despite the losses that the harvest of vegetables and fruit will be at the level of last year, primarily owing to the construction of new hothouses and the fruiting of new gardens. Cold weather and rains delayed the planting of many vegetables – cabbage, potatoes and carrots. This is why the new domestic crop was late to come to the market. Therefore, bad weather explains the additional price hike in June above the typical seasonal increase in prices.

Usually, price hikes are the highest in May – domestic produce is in short supply while imports are the highest. This year prices became stable only in late June. A seven percent decline in prices was registered on July 17, when the first crops from the south of the country arrived at the shops. Vegetable prices will be much lower in August-September and the situation will be fully stabilized.

In order to minimize seasonal price fluctuations over the coming years, we need to build more vegetable storage facilities that would make it possible to use Russian produce until the summer harvest. The Government State Program makes provisions for state support for building and modernizing storage facilities for potatoes, vegetables and fruit. Last year, we built and modernized storage facilities with a total capacity of 250,000 tons at a time. Now, we have a capacity of around 7 million tons, and we need around another five million. We plan to bring facilities for about another 2 million tones into operation by 2020, which will reduce the storage deficit by half.

We want to carry out this program not with federal and regional budget funding alone though, but to get outside investors involved as well. This is something we discussed with the Economic Development Ministry and the Central Bank. We will get private pension funds involved in this work, which will protect us from the effects of adverse weather in the future.

Thank you.

Vladimir Putin:

How much new vegetable storage capacity do you plan to build and in what timeframe?

Meeting with Russian Government members.

Alexander Tkachev:

We plan to build around 2 million tons by 2020.

Vladimir Putin:

Around 2 million by 2020?

Alexander Tkachev:

That is right, by 2020. But we still need to build another 2 million-2.5 million tons, and so this will require another 3–5 years.

Vladimir Putin:

So, there is still a shortage of storage capacity?

Alexander Tkachev:

Yes. Mr President, we never seriously addressed this issue in the past, as you know very well. Only over these past two years, with state support, the Government has started working actively with farmers and agribusiness companies. Economic Development Minister Maxim Oreshkin recently came to the Agriculture Ministry and we decided to bring in additional funding from extra-budgetary sources to speed up the implementation of this program.

Vladimir Putin:

Good, thank you.

Let us now turn to the main item on our agenda today – using information technology to improve access to medical care and medicines.

You know that back in March, the meeting of the Council for Strategic Development and Priority Projects considered ways to improve the healthcare system, including the need to actively introduce digital technology into this sphere, which will open up fundamentally new possibilities for medical doctors and, most importantly, significantly improve the level of medical care in our country.

The task of computerizing hospitals and outpatient clinics, as well as connecting them to high-speed internet, was also set in the Address to the Federal Assembly. I would like to hear how this work is progressing.

Notably, many medical organizations already make active use of electronic documents, electronic medical records and electronic doctor appointments. Telemedicine services are expanding. We are aware that, unfortunately, there are issues, including, strangely enough, with organizing this kind of digital work. Let us discuss this, as well.

To reiterate, all of this will help the patients, regardless of their place of residence, to get qualified medical care, and doctors will be relieved of unnecessary paperwork, and spend more time focusing on the patients.

Today, the State Duma is considering, in the second reading, a draft law that should form a regulatory framework for the functioning of a unified information system in healthcare. I hope that this important document will soon be adopted, and I would like you to provide a clear deadline for completing the implementation of this system.

Next, the Government has already considered the issue of establishing a system for monitoring and controlling the procurement of medicines for public and municipal needs. It should reduce prices and streamline budget spending, which means that the state will be able to provide free medicines to a larger number of eligible patients.

I would like to emphasize that access to free medicines is one of the most acute issues. This issue was raised, as you may be aware, during the Direct Line with the President, and the Minister of Healthcare and I have also discussed it. I am sure people in the regions put these questions to you as they do to me at various events. I would like the Government to focus on ways to resolve this issue.

As far as we know, the drug procurement monitoring and control system has been in test mode since March. It should start running full-scale in January 2018. It is important to make this system fully operational, and make sure the bidders are fully accountable for the accuracy and reliability of the data they put into the system.

Let us work through this issue thoroughly.

Ms. Skvortsova, you have the floor.

Healthcare Minister Veronika Skvortsova:

Mr. President, colleagues,

Using digital medical technology is particularly important for developing healthcare and enhancing access, quality and effectiveness of healthcare. Digital medicine is thus one of our priority strategic development projects and one of the Digital Economy program’s five main components.

Mr. President, as you have said, you outlined in your Annual Address the priority steps for developing digital technology in the healthcare sector as related to overseeing the market of vitally important medicines and preventing price hikes when hospitals and medical centers make their purchases. This way we can increase the number of people eligible for state-subsidized medicines; improve working conditions for doctors, particularly in primary medical care, by cutting the time they spend on matters not related to their primary activity, and introduce convenient services for interaction between the public and medical organizations.

Acting on your instructions to improve the provision of medicines and reduce inefficient spending in the regions, the Healthcare Ministry and state corporation Rostec have developed and launched the experimental operation of an information and analytical system for the monitoring and oversight of state and municipal medicine purchases.

To develop a new purchase management model, the Healthcare Ministry put together a structured reference book and catalogue of medicines based on state registers, registered medicines, and maximum sale prices. Together with the relevant federal bodies – the Treasury, the Finance Ministry, and the Federal Antimonopoly Service, we integrated the new information and analysis system with the unified purchasing information system. Essentially, the catalogue of medicines is now integrated into the purchasing system. This makes it possible to rapidly analyze information on purchase planning and based on tender results. The system calculates average market prices for similar purchases of international non-patented and trademark medicines and identifies any deviations from these averages.

Pursuant to your instructions of March 1, this system is now working in trial mode, collecting data, and, at the same time, working through some of the technical subtleties of the system’s functioning. To date, the system has registered 29,400 executed contracts for 22,200 trademark medicines worth a total of 20.6 billion rubles. Today, we can already see the average prices in real time, including in terms of producers, suppliers and state customers for medicines.

The plan provides for putting the system into commercial operation on January 1. To make this possible we must adopt some normative acts this year. The main one is the law you mentioned, Mr. President. This is the law on a single healthcare information system on the country’s entire territory. One of its components is information and analytical monitoring of purchases. This law will also introduce regulations in electronic document management and telemedicine.

On June 15, the law passed its first reading. Now it has been submitted for the second reading and for us it is extremely important to adopt this law during the spring session.

(The Minister went on to list specific legal acts and resolutions of the Government, which should be adopted to ensure the functioning of the information and analysis system.)

Further development of the information and analysis system is related to its integration with other segments of the Single State Healthcare Information System, which will make it possible to track the entire process of pharmaceutical support: from checking the accuracy of medical prescriptions based on clinical recommendations to assessing the amounts of leftover medicines in medical institutions, pharmacies and warehouses. A relevant pilot project on providing two regions – St Petersburg and Sverdlovsk Region – with oncological medicines was launched this year in cooperation with the company Biokad.

We are also planning to integrate the information and analysis system with the automated monitoring of the movement of medicines on the basis of their marking, which will allow us to quickly find low-grade and counterfeit products, recall them from the market and, most importantly, prevent their repeated return to it, that is, the resale of expensive medicines bought on government money for preferential provision.

As for other components of digital medicine, in 2014 we summed up the results of the modernization program in this area and adopted a plan for developing regional medical information systems. In 2015, the Healthcare Ministry signed an agreement on the regional plan for healthcare information support for three years with every region of the Russian Federation. The aim of these agreements was to even out regional differences on information support by late 2018.

To date, 75 percent of the medical workers’ workplaces have been automated; 72 percent of medical organizations and detached structural units, 18,100 in total, have been connected to high-speed internet, with 13,800 medical organizations and detached units waiting to be connected. Of these, 7,100 do not have access to the internet, and 6,700 need their current connection upgraded; 64 percent of medical organizations and detached structural units are connected to a protected data transmission network.

Medical information systems have been introduced in 72 Russian regions and almost 7,000 medical organizations, which is about one-third of the total need. Integrated regional medical information systems have been formed in 82 Russian regions, with the exception of Oryol and Tver regions and Chukotka Autonomous Area.

Centralized Medical Image Archives websites have been created in most regions, with 66 regions actively using this website to transmit images from devices located in over 2,000 medical organizations, as well as a website for lab tests with 61 regions transmitting electronic lab results at outpatient clinics and hospitals. The medical vehicle dispatching system has been introduced in 78 regions, with over 89 percent of ambulance stations connected to it.

The accessibility of medical care, quick and hassle-free doctor appointments are particularly important for our people. To achieve this, electronic schedules of doctors' hours and the possibility of making online doctor appointments have been introduced. Currently, 82 Russian regions are using the electronic doctor appointment system, except Pskov Region, the Chechen Republic, and Chukotka Autonomous Area.

Our goal is to ensure consistent and high-quality doctor appointment service in all outpatient clinics of the country using the patient's user account on the Unified Portal of Public Services before the end of 2018 as medical organizations get connected to the internet.

(Minister Skvortsova then went on to discuss the system to monitor the time spent by patients at outpatient clinics as they wait for the doctor to see them, the introduction of electronic paperwork, and other aspects of implementing information systems at medical organizations.)

The introduction of the information and analysis system in healthcare will make it possible to launch the register of electronic medical documents. This nation-wide uniform register will contain the documents of each patient, which will make it more convenient for patients and ensure continuity in the diagnosis and treatment of patients in various clinics in different period of their lives.

Needless to say, personal data on patients will be strictly protected and anonymous in the database. Access to the register will be given only to patients through personal accounts and an attending physician by agreement with the patient. The federal platform – the register of online medical documents – will be launched this year and will start gathering information after the law comes into force. The complete switch to electronic medical documents will be conducted stage-by-stage until 2024 depending on the readiness of the infrastructure of medical institutions. The deadlines for introducing electronic document management are fully coordinated with the Digital Economy program.

I would also like to mention the introduction of telemedicine and its technology, which is important for making medical care more accessible and improving its quality.

Remote cooperation between physicians has been practiced in Russian medicine for several years now. Tele medical complexes for communication between regional vascular centers and primary vascular units were established during the introduction of the vascular program in 2008 and have been actively working for practically a decade. Medical institutions were equipped with tele medical systems involving video links during the modernization program.

Today telemedicine exists in 83 regions of the Russian Federation (the Altai Republic and the Chukotka Autonomous Area are the only two regions that are not using it) and over 4,400 medical institutions are actively using it. In 2016, we started the formation of a vertically integrated tele medical system that links our national medical research centers with relevant regional units. Seventy percent of the regions are already connected to this system. We plan to connect all 700 third level regional institutions to the federal tele medical system in 2017–2018. They will be provided with continuous methodological support, remote case conferences with video links and mandatory electronic management of paperwork and preservation of digital images.

The existing base of anonymous digital medical images analyzed by the federal center specialists will form the basis for creating and implementing intelligent systems for supporting medical decisions.

Notably, the first such Russian system for early diagnosis of stage one lung cancer is being effectively tested. After we properly interpreted the first 13,000 computer and magnetic resonance images and put them into the system, the program began to show high diagnostic effectiveness. This testing is carried out on the basis of the Federal Preventive Care Centre.

Telemedicine technologies are used for individual health monitoring as well. Currently, Russia has a vast array of non-invasive personal telemedicine devices for remote interaction between the doctor and the patient. This year, we will finalize the implementation of two pilot projects in Tyumen and Leningrad regions, where we remotely monitor at-risk patients’ blood pressure. According to preliminary data for the first half of the year, such an approach allows us to correct the pressure in a timely manner, and reduce the number of hypertensive crises, emergency hospitalizations involving an ambulance, and the death rate. Within the framework of the national Health Net program, one of the objectives to achieve by 2025 is to expand the individual health monitoring system to all regions of the country.

Mr. President, today we have already made good progress in developing digital medical technologies, and all of our plans, both the near- and medium-term ones, will be implemented under three basic conditions. They include the early adoption of the law (we hope, it will be done during this spring session), since it is the law that establishes the mandatory operation of the regional segments of our system. The second is the implementation by the regions of the road maps on regional computerization signed by the governors. The third is the execution of the plan of the Ministry of Communications based on the directive in the Address, on connecting all outpatient clinics and hospitals to high-speed internet by late 2018.

Thank you.

Vladimir Putin:

The Duma spring session will last only three more days.

Veronika Skvortsova:

Mr. President, the hearing of the law will be held today at 18.30.

Vladimir Putin:

Fine.

<…>

Meeting with Government members.

Vladimir Putin held a meeting with Government members on measures to protect the rights of people involved in shared-equity construction projects and on defining the legal status of self-employed individuals.

President of Russia Vladimir Putin:


Good afternoon colleagues.

Today, we are here to discuss several issues. I would like to start with several matters that came up during the Direct Line. These include allocated the required funds to affected regions, hit by spring floods or fires, and, above all, making sure that they reach their recipients, the ordinary citizens. You heard the complaints that came in from citizens, and these are justified complaints. The money has not always reached its recipients. This issue demands our attention. I ask the Emergency Situations Minister to brief us on the current situation on the ground.

We will then discuss proposals on possibilities for continued use of residential buildings and capital infrastructure installations located in the protected area around oil and gas pipelines. I realize that this is a sensitive issue for both network operators and our citizens. We need to find a solution.

Next, we will look at protecting the rights of people involved in shared-equity construction projects, and defining the legal status of self-employed people. Finally, we will look at giving Russian ships a priority right to transport and store hydrocarbon fuel extracted on Russia’s continental shelf and in its exclusive economic zone.

Let us begin with the first question I outlined, namely, making sure that state funds allocated for helping those affected by disasters reach the people they are intended for.

Let me add here that the federal and regional authorities must monitor this constantly and strictly. We are talking here about both financial compensation for full or partial loss of property and rebuilding housing.

Mr. Puchkov, you have the floor.

Civil Defense, Emergency Situations and Disaster Relief Minister Vladimir Puchkov:

Mr. President, colleagues,

Acting on your instructions, the Emergency Situations Ministry continues to bolster its disaster relief capabilities and enhancing the efforts of personnel and management on the ground.

There are, however, a number of problems with submitting the documentation needed for obtaining material assistance. Just two or three years ago, it took 3–6 months to receive this assistance, but the Emergency Situations Ministry and Finance Ministry have worked since then on speeding up allocation of funds from the Government Reserve Fund, and today, it takes ten days for a Government resolution on aid. We continue work on improving these procedures.

Acting on your instructions, in Stavropol Territory we have taken additional efforts. All federal agencies’ operations groups and the relevant Sberbank offices are working 24/7 to complete the work. Of the 17,000 people affected, 12,000 have already received financial aid from the federal budget and Stavropol Territory’s budget. We still have 24 aid centers working on the ground, providing the necessary help and support to people. These centers also offer legal services with specialists from the relevant organizations helping people to get the documentation ready and assisting them with court rulings to get people recognized as eligible for assistance. We are also building up the federal authorities’ and regional agencies’ efforts to further improve work in this area.

At the same time, taking into account our experience, Mr. President, I propose giving the Emergency Situations Ministry the added function of tightening oversight over local government and regional executive bodies’ work to prepare the necessary documents, update the lists of disaster victims, get the appropriate aid to all, provide housing, restore social infrastructure, and resolve other tasks.

This ends my report. Thank you for your attention.

Vladimir Putin:


I am not against the idea, but we would need to work with the lawyers and look at the issue. I think though, that within the scope of your powers with regard to disaster relief, this is probably something that could be done. In any event, we need greater discipline in this area.

Regarding particular regions, I know that money reached people on the day of the Direct Line, but the money was there in the accounts. In Stavropol Territory, for example, they had up to 6 billion rubles, I believe, on the accounts. Knowing that the money had been transferred in full, they could have been quicker to begin this work. Of course, the Emergency Situations Ministry should monitor closely what is happening. However, your ministry should be quick in its work to assess the extent of the damage. We know that without relevant conclusions from the commissions doing this work, decisions cannot be taken. Therefore, you need to work faster and avoid delays. All right?

Vladimir Puchkov:

Yes.

Vladimir Putin:


Mr. Siluanov, do you have any comments on this matter?

Finance Minister Anton Siluanov:

Mr. President, the Finance Ministry and Federal Treasury are directly responsible for transferring and monitoring funds for people affected by disasters. The treasury has received the necessary instructions to ensure that decisions are implemented and money for compensation is transferred without delay, the moment the decisions have been made and the lists of people in need of aid are finalized. The Finance Ministry keeps this matter under particularly close watch and money is transferred without delay the moment the necessary decisions have been made.

Vladimir Putin:

But this is not happening without delay. How can we say ‘without delay’ if the money is transferred only on the day of the Direct Line? This is not ‘without delay’. I ask you to pay greater attention to this matter.

Anton Siluanov: 

I see.

Vladimir Putin: 

Now, on the subject of dumps and putting order into the situation with solid household waste landfills. You saw them too, not that seeing them matters. You know quite well how serious this matter is. I just want to understand who exactly gave permission for construction there, at a site in Moscow Region, for example? Mr. Donskoy, do you have information on this? You cannot say that people simply occupied the land of their own accord and built something there in violation of the laws. We are talking about entire apartment blocks, multi-storied blocks.

Minister of Natural Resources and the Environment Sergei Donskoy:

Yes, Mr. President. Let me clarify. Our ministry is not responsible for this, but we raised these issues and clarified the following information. The safety zone set by the sanitary and epidemic officials around this dump is 500 meters and it was set in 2003. The buildings concerned were built outside this zone and did not violate any regulations. We have spoken with the head of Rospotrebnadzor [national consumer protection agency] about clarifying and assessing the risks this dump poses. They say that the construction of these buildings, which was approved several years ago, did not violate any regulations. This is the legal situation as it stands today.

Vladimir Putin: 

No laws were violated, but it is impossible to live there.

Sergei Donskoy:

Yes, we are acting on this and have agreed on the following steps. We have reached agreement with the governor on closing this dump in 2019, with the construction of new facilities. Given the amount of waste transported from Moscow to Moscow Region, we will need to build new landfills. However, before the dump in question is closed, they have already received instructions to build the necessary infrastructure to reduce or even eliminate emissions of biogas and filtrate. In other words, they will need to take the steps necessary to reduce the environmental impact.

Overall, this issue is quite serious. Around the country as a whole, we have more than 4000 authorized landfills. Over the last four years, we have identified more than 200,000 illegal dumps. Of these, 70 percent have been liquidated and 57,000 remain at present. We realize that this matter needs a systemic solution. We passed a law in 2014 that puts in place conditions for developing a new waste treatment system.

Vladimir Putin:

Law 458?

Sergei Donskoy: 

Yes.

The key issues that need to be resolved in the nearest future are drawing up and approving the territorial plans, appointing regional operators, setting the relevant price rates, and having the regions adopt investment programs. To date, 83 regions have approved territorial plans, and 7 regions have already chosen regional operators. Operation is due to begin on January 1, 2019, when all regions are supposed to make the transition to the new system, but 27 regions have confirmed that they are ready to start work under the new system this year. They will choose regional operators in the second half of this year and on this basis will establish investment programs that will take into account measures for liquidating the dumps and building a new infrastructure.

The law’s second innovation is to oblige producers and importers to either treat goods themselves once they are no longer fit for use, or pay the state an environmental tax. Let me stress that this environmental tax is not so much a tax instrument as an incentive for companies to treat waste. This provision has come into effect now and companies began paying this tax in the first quarter. We have collected 1.5 billion rubles, which will be used as subsidies for the pioneer regions.

However, the regions still note an investment deficit. We think it necessary to change the approach to calculating this environmental tax. This is primarily because a decision was taken in 2015 to set a minimum level for waste treatment of goods. This was economically acceptable at the time, but today, with the need to invest in building infrastructure and to liquidate the landfills themselves, we propose having the Government come back to the matter of expanding the list of goods that could come under waste treatment schemes and increase the level of waste treatment from a minimum level to a level that would be acceptable now. This would, in principle, make it possible to collect up to 30 billion rubles to allocate to the regions to fund the necessary work.

The Government has also approved the Clean Country priority project, which also involves work to close dumps. This program will see the closure of 15 dumps in 11 regions. More than 5 billion rubles will be spent on this before 2019.

I would like to point out another important aspect. We realize that reclamation of landfills is a fairly complicated issue. Occasionally, it is impossible to track down their owners, and this becomes the responsibility of the state. We propose drafting an economic mechanism that would guarantee the liquidation of landfills once they have run their course. In other words, there must be an anchor, so to speak, to keep everyone in place, to stave off bankruptcies and, accordingly, liquidate all landfills. There is an international practice of creating liquidation funds for such sites. Accordingly, if possible, please instruct the Government to work through such a scenario as well.

There is another issue that I would like to bring up, which is Class I and Class II waste, which, we believe, also needs to be handled more efficiently, as these are the most dangerous waste classes. According to international practice, dedicated state-run entities deal with Class I and Class II waste. We propose working through this issue in conjunction with Rosatom, which, as a state organization, deals with hazardous radioactive waste. We have held talks with the factories, which used to engage in liquidation of chemical weapons. We could involve them in this work. There is a lot to do, so we can upgrade these plants and use them to handle Class I and Class II waste.

Thank you.

Vladimir Putin:

Thank you for sharing this with us. It is interesting and important, without a doubt. This is quite a job, and this matter has been swelling for decades, dating back to Soviet times. The issue is clear and requires vast systemic efforts.

You said it is impossible to identify the owners. Well, this is our fault. What kind of operation is it if we cannot even tell who the owners are? I still have questions after what you told us, just like the people you represent who asked me questions about how one can live in such conditions. Tell me, as a representative of the people who live near this dump, when will this dump, which makes life so difficult for them and their children, be closed? When will it be closed and how do you plan to go about it? In specific terms.

Sergei Donskoy:

The Governor promised to close this landfill in 2019. Before this is done, in 2017 they will start designing systems for reclaiming it and will begin preparations for their installation in 2018. Modern reclamation technology requires systems for biogas diversion and filtration. They are planning to install them this year.

Vladimir Putin:

Wait. Please tell me what exactly must be done with this landfill. Will it be eliminated? What will happen to it? I simply want to understand it myself.

Sergei Donskoy: 

Its license will be withdrawn by 2019.

Vladimir Putin: 

We will discuss the deadlines shortly. What exactly should be done?

Sergei Donskoy: 

First, it is necessary to make all preliminary estimates for the condition of this landfill, and this is being done now. Plus, by 2019…

Vladimir Putin:

No, you are again talking about 2019. I do not want to hear any deadlines. I want to understand what has been done. “It is necessary to make all preliminary estimates…” Estimates of what?

Sergei Donskoy: 

First, the condition of the landfill’s geology plus the structure of the waste. It will be necessary for the design work.

Vladimir Putin: 

All right. That is clear. What next?

Sergei Donskoy:

Next comes the reclamation project. This, in turn, will be subjected to environmental expert evaluation. Once this is done, the Governor must request that the Government include this landfill in the register of sites slated for elimination of past damage. Then the elimination will begin, starting in 2019. 

Vladimir Putin: 

Elimination?

Sergei Donskoy: 

The landfill’s elimination.

Vladimir Putin:

So, will everyone continue bringing waste there until 2019?

Sergei Donskoy: 

Mr. President, this landfill was not included in the list of sites slated for elimination.

Vladimir Putin: 

It does not matter whether it was included or not. My question is different: will rubbish be dumped there until that time?

Sergei Donskoy:

No decision has been made to close it once and for all as of today. It was necessary to carry out all the preliminary work. 

Vladimir Putin:

Now listen to me, and I want Vorobyev [Moscow Region Governor] to hear me as well. Close this landfill within one month. The documents that must be prepared (I do not want to give you impossible tasks) should be ready in the shortest possible time. I am referring to this expert evaluation: geological surveys, the structure of the waste and the like. I do not know how quickly this can be done but in a month I will ask you and Vorobyev what has been done.

Thirdly. You said that he has to write a request for the required funding. Consider this done. The request will come in by the end of the day for sure. We have 5.4 billion rubles of federal budget funds allocated for this purpose and another 1.5 billion collected through the environmental tax. This makes close to 7 billion rubles. So, use this money. If needed, we will ask the Finance Ministry and we could even allocate some money from the Government reserve fund and my reserve fund – we have money there – for financing this work. The question of where the waste will be taken must be settled as rapidly as possible, to some other location, far from places where people reside permanently.

I want the Presidential Executive Office to write this down as an instruction. Mr. Medvedev, I ask you to take this under your control and see it through. Do you remember what I said?

Sergei Donskoy:

Yes, Mr. President.

Vladimir Putin: 

Good.

Now, regarding the reconstruction of the regional road network. I have discussed on past occasions with the Finance Ministry the matter of allocating part of the revenue collected from excise duties, which were raised a while ago. 

Mr. Sokolov will begin and Mr. Siluanov will then comment.

Mr. Sokolov, you have the floor. 

Transport Minister Maxim Sokolov: 

Thank you.

Mr. President,

Today, according to the National Statistics Agency, the national road network comes to around 1.5 million kilometers. Of these, around 500,000 kilometers are regional roads and around 930,000 kilometers are local and municipal roads. According to the Statistics Agency, only 41.5 percent of the roads meet the quality norms for roads, and less than 40 percent meet the standards for regional, local and municipal roads. This is due to many reasons, particularly because the regional road funds receive insufficient funding to be able to ensure that roads are kept up to standard. The regional road funds are financed at only around 15–16 percent of their stipulated levels (which vary from region to region but for a large part conform to federal standards). This money is then spent on road maintenance, capital repair and bringing roads up to regulation standard.

Moreover, decisions were made in previous years to increase the amount of excise taxes, but the bulk of these additional taxes has never made it to the regional road funds. Earlier, the ratio between the federal budget and the regional road funds was 88 to 12 (12 went to the federal budget), but, in accordance with the amendments introduced to the Budget Code, only 61 percent of collected excise taxes go to regional road funds. Even less, 57.5 percent is planned for 2018, and about 60 percent in 2019.

Of course, we are convinced that all excise taxes should be sent to the regional road funds and be used to fundamentally improve the situation with maintaining regional and municipal roads. This year, this could amount to about 110 billion, and in 2018, if we bring it up to the previous standard, it could total 160 billion. If we go all the way and make 100 percent of all collected excise taxes available to the regional road funds, it would give them an additional 225 billion, that is, almost one third of the existing amount. These funds would be used to repair, rebuild and renovate roads and, of course, this would help improve the situation with the regional road funds.

However, it should be noted that the regional authorities themselves do not send the collected excise taxes to their respective road funds. According to the Treasury, Saratov Region regularly withdraws about 6 billion rubles from its regional road fund, which is more than half. Kalmykia uses federal transfers to almost completely substitute for the collected excise taxes, as do Tver Region, Krasnodar Territory, and Stavropol Territory. Of course, regional authorities would also benefit from stricter discipline. The legislation was amended accordingly last year, and the Government closely monitors to ensure the full compliance by regional authorities with their obligations related to replenishing the road funds.

These are the main causes and our proposals that could improve regulations regarding the upkeep of regional and local municipal roads over the next few years.

Thank you.

Vladimir Putin:

Do you check the costs involved in maintaining one kilometer of road?

Maxim Sokolov:

Yes, the federal Government adopted the federal road maintenance standards. Most recently, we have amended our key resolutions accordingly and cut the amounts. We believe the regions should be guided by this federal approach. Some of them have already brought their regulatory documents in line with federal requirements, others not. Of course, initially the regions would be advised, based on the funds available in the budget, to adopt such documents. We believe this can be done this year or the next. In the future, 100 percent of the regional road funds should be used to repair and maintain regional and local roads the way it is done at the federal level with regard to federal motorways.

Vladimir Putin: 

Mr. Siluanov, please.

Anton Siluanov:

Mr. President, in recent years, especially when federal budget revenues declined, we decided to raise excise taxes which were directed to the federal budget and used for federal needs. By the way, we use these excise taxes to help the regions to partially carry out such federal road projects. Indeed, this amounts to about 200 billion rubles. Therefore, simply transferring this source of revenue from the federal budget to the regions could cause issues with us meeting our obligations. We have some ideas.

We are now preparing proposals for changes in the taxation system. I think we could use these proposals to improve the taxation system and to address this issue as well, and ultimately transfer the excise taxes in full to the regional budgets without detriment to the federal budget. In addition to federal roads, we have other major challenges. We spend less on federal roads than the regions. We spend about 660 billion rubles from the federal budget for the purposes of the Federal Road Fund, whereas the regions spend about 740 billion.

Of course, we would also like to make sure that all excise taxes on petroleum products are transferred to the regional road funds. However, we need to take into account the interests of the budget. We have come up with appropriate proposals as part of our proposals regarding changes to the taxation system.

Vladimir Putin:

When we resolved on these excises, we believed they would mostly go to the regions, as far as I remember. How was the question raised initially, Mr. Sokolov?

Maxim Sokolov:

Yes, this is how it was raised initially. When this decision was made, there was a certain ratio in the distribution between the federal budget (not even the Federal Road Fund but the federal budget) and the regional road funds. This ratio was observed: 88 percent from the collected funds went into the regional budget and 12 percent into the federal budget. However, two years ago and last year decisions were made to increase excises. In all, excises on different classes of petrol and diesel were increased by four rubles but from these four rubles roughly only one ruble went to the regional road funds. This is why this ratio was changed and today we have reached the figures I mentioned – roughly 60 to 40.

Vladimir Putin:


Mr. Siluanov, we made a decision on distributing revenues from excises two years ago in fairly complicated economic conditions. Now the situation is changing. GDP forecasts are changing for the better and the federal budget fill rate is on the up. By how much have budget revenues increased over the past year? 26 percent?

Anton Siluanov:

Yes.

Vladimir Putin: 

By 26 percent.

Now about federal, local and regional roads. About 77 percent of the federal roads have been put into shape, right? For regional roads, the figure is about 46–52 percent. The difference is huge. What about regional roads?

Maxim Sokolov:

For regional roads, the figure is even smaller. It will reach about 42 percent by the end of this year.

Vladimir Putin:

Yes, 34–42. Therefore, we should keep the current pace on federal roads but should not ignore regional roads to such an extent. Therefore, what you said is probably right. Strictly speaking, ‘probably’ is the wrong word. This is exactly right, not probably. But again, redistribution within the tax system should not be like this – you compel them to pay excises and then pinch off so much that again they have no money for roads.

When were you going to formulate this proposal?

Anton Siluanov:

Mr. President, under the plans for upgrading the tax system we must prepare our proposals this year, adopt tax legislation next year and implement in 2019.

Vladimir Putin:

So, 2019 again. Very good.

Mr. Medvedev, I would like to ask you to work with your colleagues on this issue separately. I will not decide now how much, but it is absolutely clear that part of the funds we took from these excises should be redistributed to the regions. At least one ruble must be added to them.

Prime Minister Dmitry Medvedev:

We will get to the bottom of the matter and come up with proposals on how to increase the regional component.

Vladimir Putin:

50 kopecks, one ruble, I do not know. Think about this, all right?

Dmitry Medvedev:

All right.

Vladimir Putin:

Mr. Siluanov, I would like you to study the problem in the same vein or else we will go beyond 2019, followed by 2020 and 2025 and we will ride there in carts because it will be impossible to move at all. The road network is degrading. It is vital to pay attention to this. Now let us turn to the issues that I described as the main ones: oil pipelines and residential buildings that are located along them.

<…>

Link: Блог Владимира Путина.

PHOTO:

Russian President Vladimir Putin.

Vladimir Putin at the meeting with Government members.

Meeting with Russian Government members in the Kremlin.

Emergency Situations Minister Vladimir Puchkov at the meeting with Government members.

Minister of Construction and Housing and Utilities Mikhail Men at the meeting with Government members.

President of the Russian Federation Vladimir Putin.