Alexander Deryugin, a Researcher of the Budget Policy Department at the Gaidar Institute, commented to the RBC on the conclusions of the Accounts Chamber on the execution of the federal budget law for 2022, stating growth of receivables of the federal agencies by 53.3%.        

According to the publication, the federal budget receivables for expenditures increased by Rb 3.26 trillion and reached Rb 9.37 trillion. It is mainly attributable to advances issued under state contracts. Among the reasons for growth in advances the auditors name the obligations of subsidy recipients that were not fulfilled in the reporting period.

The RBC recalled that in March 2022, the government allowed participants in public procurement to receive an advance payment of up to 90% of the contract price instead of the usual 30% under sanctions and difficulties in the economy. For 2023, an increased advance payment of up to 50% of the contract price has been approved. Companies entering into state contracts for capital construction in the new Russian regions may receive up to 90% of the price as an advance payment.

Alexander Deryugin considers rise in debts to be natural in the wake of growth in government contracts. He attributes rise in debts to changes in the structure of government procurement, but does not see this as a long-term trend. “Suppliers, especially if the customers are law enforcement agencies, may face problems, because they have not produced such volume and products before. This is not surprising, given the current situation. When enterprises produce the same volumes and then need to increase them sharply, there is not always enough production capacity and people have to be hired,” he explained.

The expert reminded that now Russia has a record low unemployment rate (3.2% at the end of May), thus, it is rather difficult to quickly recruit the required employees using the labor market. “However, on the whole, the economy is adapting, private business is quickly adjusting to the new conditions. I think that federal budget receivables will not grow further unless we have an even stronger change in the structure of purchases”, he concludes.