“Davydov.Index”  presents the opinion of Alexander Deryugin, Researcher of the Budget Policy Department of the Gaidar Institute on the RF Government’s extension of subsidies to regions providing the income tax investment deduction to companies.

“Undoubtedly, a tax deduction is bound to benefit them in long-term. But the problem is different: regions and households have to live now and the main federal budget subsidies are related with support of the population. Amid a pickup in the rate of unemployment and a fall in Russian households’ incomes, low-income categories of citizens are hit harder during a crisis and regions increase a financial aid to households,” Alexander Deryugin says.

Alexander Deryugin notes that amid sudden growth in expenditures over revenues some regions with a more or less balanced budget manage without an additional financial aid. A portion of such regions cancel investment deductions because they believe that nobody is going to make investments.

“Probably, in some regions with large industries, some investments were announced in advance and it has helped implement investment plans. But those regions which did not have such opportunities take normally decisions to suspend investment support measures just to make ends meet,” Alexander Deryugin says.

“And here we must pay tribute to the RF Government’s anti-crisis policy. In this crisis, the RF Government helps regions quite a lot: one can judge about it by the volumes of transfers and public budget loans. The government allocates directly additional financial subsidies to regions and those who extend investment incentives and provide a targeted financial assistance. These are actually quite substantial anti-crisis measures,” the expert believes.

Alexander Deryugin notes that in most developed countries priority is given to support the small business, while in Russia the main subsidies are meant for households. However, the government’s new measures are aimed at supporting regions and the business.

“The government measures are currently aimed at promoting sustainability of the business. We support business by means of investments. I think it is right because it makes sense to support new enterprises and assets. It is our future,” Alexander Deryugin sums it up.