ALEXANDER DERYUGIN: “INITIATIVE OF THE ACCOUNTS CHAMBER WILL NOT HELP REGIONS TO SOLVE THE PROBLEM RELATED TO GROWING NATIONAL DEBT”

Alexander Deryugin, a Researcher of the Budget Policy Department at the Gaidar Institute, commented on the initiative of the Accounts Chamber on the introduction of liability for regional authorities for exceeding the credit load.

Budget loans have not helped reduce the amount of public debt of the regions and reduce their burden, said “Izvestia”, having read the report of the Accounts Chamber (AC) on the effectiveness of the use of federal budget by regions of the Russian Federation. Regions did not comply with the limits set by the Budget Code on the amount of borrowing and used budget loans to repay the debt and pay for current expenses, while the minimum amount was allocated for investment. Moreover, regions often attract market loans even if there are significant balances in their budgets. This results in unreasonable expenses for their servicing, the agency stressed.

In this regard, the Accounts Chamber proposed the Ministry of Finance to tighten the procedure for issuing budget loans and introduce responsibility for exceeding the limits on the volume of regional borrowing, as well as to limit the receipt of commercial loans, if the local budget account has significant amounts, as well as with unused limits of treasury borrowing.

Regions simply lack funds to repay previously received loans, says Alexander Deryugin. The expert calls the proposal of the Accounts Chamber technically correct, but believes that the initiative will not help solve the problem of increasing the national debt. Instead of tightening the terms of issuance, we should increase financial assistance to the regions in the form of non-investment loans or in the form of subsidies, said Alexander Deryugin.