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Mr Medvedev said that priority must go to funding for economic modernisation and support for innovation projects.

The President also spoke of the need to maintain social stability, noting that the country’s modernisation drive also pursues the goal of improving people’s lives and strengthening the existing social safety net.

Taking part in the meeting were Deputy Prime Minister and Finance Minister Alexei Kudrin, Deputy Prime Minister and Government Chief of Staff Sergei Sobyanin, Chief of Staff of the Presidential Executive Office Sergei Naryshkin, Presidential Aide Arkady Dvorkovich, Health and Social Development Minister Tatyana Golikova, Economic Development Minister Elvira Nabiullina, Chairman of the Central Bank Sergei Ignatyev, and Chief of the Presidential Expert Directorate Ilya Lomakin-Rumyantsev.

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President of Russia Dmitry Medvedev: We discussed some particular budget policy issues, those related to innovation, in particular, in Obninsk. Now, here in Gorki, let’s discuss budget policy in more general terms.

We last discussed this in January. The Government has worked hard since then. This work is all part of the Government’s traditional responsibilities, of course, but at the same time, the budget’s formation has also been discussed by the Commission on Modernisation, as I mentioned, and by the Council for the Implementation of Priority National Projects and Demographic Policy, the Council for Development of the Information Society, and a number of other presidential councils and government bodies. Now we need to work out a consolidated position regarding the budget’s main priorities, including budget spending priorities and changes to the tax system. We will also need to prepare the Budget Address.

The country is in the process of recovering from the crisis and reviving economic growth. The forecasts for this year are not bad on the whole, but the effectiveness of our post-crisis policy and how our economy and country will develop in general will depend on how carefully we plan and think through the decisions we make now.

We need to use as wisely as possible the resources available at this time when we face a budget deficit. This is no easy task. Each ruble of budget money must be spent with maximum effect so as to achieve a long-term impact that will see budget parameters improve over the next three years and bring real benefits for present and future generations.

Another issue that I always raise at such discussions and that I have a duty to mention again now is the importance of maintaining social stability in our society. This is a very difficult task, a very important task, but at the same time, we must not let slip good opportunities for making structural changes to our economy, which is precisely what we have been working on in the Commission on Modernisation. 

Budget spending must become one of the main instruments for our future economic growth. We need not only to earmark money for supporting innovative projects and promising scientific developments, but also create incentives in general for using new approaches, new technology, making more effective use of resources and developing scientific and human potential. We spoke about this just before at the Commission on Modernisation’s meeting.

A clear priority needs to go to funding for economic modernisation and for the projects that we have put at the top of our agenda. Ultimately, these decisions also aim to raise our people’s quality of life, create new economic opportunities for consolidating the existing social safety net, raising pensions, raising benefits for socially vulnerable groups of people, and obtaining new sources of revenue through economic diversification. At the same time, we also need to continue supporting our education, healthcare and social protection systems, work on housing construction, and continue implementing all of the social programmes we launched a few years ago and are continuing to carry out now, despite the crisis.

Let’s begin work.