On the Execution of the Federal Budget in January 2012

On 10 February, the RF Ministry of Finance (Minfin) released its preliminary estimates of the execution of the federal budget in January 2012.
On 10 February, the RF Ministry of Finance (Minfin) released its preliminary estimates of the execution of the federal budget in January 2012.

In this connection, both the Minfin officials and independent observers noted a general improvement of the situation with regard to budget execution: over the year's first month, revenues amounted to 9%, and expenditures - to 8.5% of the per-annum outlay and revenue targets set for the year 2012 in the current budget law.


The expenditures under Item 02 ‘National Defense' rose to 8.0% of the per annum target against 1.5% a year ago which, no doubt, can be regarded as a definite step forward. At the same time, that figure is evidently too low - even considering the promise that the drawing-up of the government military procurement contracts will be completed by mid-April (instead of early March, as stated in the government's instruction issued earlier), while the advance payments will cover nearly 100% of the contracts' value. It is not difficult to guess just how realistic the government's policy on this issue can be - in fact, its actual implementation will require spending nearly half of the defense budget already in the first quarter...

A comparison of the size of the preliminarily estimated allocations specified in the adjusted quarterly budget revenues/expenditures sheet and the sums allocated for the year 2012 under the law on federal budget1 has shown an anomalous shrinkage, in January, of the sums allocated to Subitem 0106 ‘Provisions for the Activity of Financial, Tax and Customs Agencies and Bodies of Financial (or Financial-Budgetary) Supervision' and Subitem 0107 ‘Provisions for the Conduct of Elections and Referenda' of Section 01 ‘General state issues' by Rb 43m and 125m respectively; and those allocated under Subitem 1003 ‘Social Welfare of the Population' of Section 10 ‘Social Policy' - by Rb 24.146bn.


It is possible that the said alterations in the adjusted quarterly revenues/expenditures sheet have followed the previously noted practice of discussing a draft of the federal budget at the Federal Assembly in October - November 2011, when a sum of Rb 11bn was redistributed in favor of classified items of the federal budget without making any alterations to the total sum of budget expenditure. At the same time it cannot be ruled out that there had occurred a simple error in the original calculation that was later corrected: the thorough by-item-and-subitem specification of federal budget expenditure has not been made public for a fifth year in a row, and so it is virtually impossible to verify the quality of the process of drawing-up the budgets.


Besides, it should be noted that the Federal Treasury discontinued the publication of operative budget execution reports that was started in the summer of 2010 and continued for nearly a year and a half: the last report for October 2011 posted in the relevant section of the Federal Treasury's website is dated 21 November. At the time of this commentary, the reports for November and December 2011 and January 2012 are unavailable. And the monthly report on budget execution for December 2011 was released by the Federal Treasury only as late as 17 February - that is, a week later than last year.


In this connection, we can hardly join the ranks of those who express pleasant surprise in connection with the renewed publication, by the RF Ministry of Finance, of operative budget data. In reality we are faced only with further suppression of open information by both the Federal Treasury and the RF Ministry of Finance.


V. B. Zatsepin - Candidate of Military Sciences, Head of the Economics of the Military-Industrial Sector Department

1 Federal Law of 30 November 2012, No 371 ‘On the Federal Budget for the Year 2012 and the 2013-2014 Planning Period'. Annex 12.