The State Duma has approved a draft federal budget for 2010–2012

In November, Deputies of the RF State Duma have reviewed and approved the draft Law "On The Federal Budget for 2010 and the Estimated Period of 2011 and 2012" in the second and third reading.

As compared with the initial wording of the Law, the structure of the resource part of the budget replenishment and government commitments to the execution in 2010-2012 were revised, while the limit values of the federal budget main indicators were sustained.

Thus, according to the budget estimates, there is expected a decline in the resources of the federal budget to 15% of GDP by 2012 as compared with the advance assessments made in 2009 in the scope of 17.2% of GDP. Herewith, the volume of government obligations is also subject to a steady decline fr om about 25.5% of GDP in 2009 to 18% of GDP by 2012. Therefore, one can assume that the government intends to fulfill the obligations in full, enhancing the efficiency of the national budget execution.

With regard to the budget amendments, adopted in the second reading, the most noticeable reductions in 2010 as compared with the initial estimates of the budget execution in 2009 are associated with a decrease of funding for national defense and security (by 2.5% of GDP), as well as for national economy (by 1.4% of GDP). This decline is due to the fact that the large-scale support of those areas was designed for implementation in 2009. Some of those activities were to be implemented in 2010, but in a far reduced scope. Moreover, there is planned a reduction of the total funds for 2010 federal programs, which is associated with the completion of some of them and optimization of the other federal programs.

Despite the explicit trend to budget expenses reduction, one should take into account that when comparing the volume of expenditures planned for 2010 with the pre-crisis years budget expenditures for 2010-2011, they appear to be significant only by 2012 and come close to the relative values of 2007-2008.

The draft law, adopted in the third and final reading includes estimates of the total expenditures for 2010 with a breakdown by classification of budget lines, whereas the indicators of spending commitments for 2011 and 2012 are presented only by lim it values. In the background of volatility of some macroeconomic indicators of post-crisis period, in our opinion, it is unreasonable to provide a detailed breakdown of the budget lines for the planning period.

E.G. Fomina, Researcher, Laboratory of Fiscal Policy