The social side of the 2003 draft budget is "quite modest and sluggish",Mikhail Zadornov, deputy head of the State Duma budget committee, toldjournalists today. He believes that expectations that the 2003 budget willbe oriented to the solution and implementation of social programs, on theeve of the parliamentary and Presidential elections, will not be justified.According to the deputy, the 2003 budget envisages a 33 percent advance insalaries to state employees and an 11 percent growth in servicemenallowances effective October 1, 2003. The latter figure is in fact equalto a forecasted inflation rate in 2003. He also pointed out that thegovernment would increase student allowances by 1.5 times only on September1, 2003.Problems with the distribution of budget revenues among Russian regions andthe federal center may occur, the deputy thinks. Although the ratio of thedistribution will remain the same, 60 percent to the federal center and 40percent to regions, regional authorities may face problems regarding salarypayment to state employees. At present about one third of regions have suchproblems, however, the total support from the federal center is to amountto 26bn-27bn rubles ($824m-856m) this year. Next year regions are notexpected to get additional funds. Moreover, they will have to repay 20bnrubles ($634m) in loans that they have received this year, he noted.Nevertheless, Zadornov believes that "the budget's fate is clear, becausethe voting on the draft budget will be provided by four centrist factions".However, the support to this budget may cause problems for deputies fromsingle-member constituencies. Some of them, including centrists, willprobably defend regions' interests..
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