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Addressing the meeting, Mr Putin said that well-balanced interbudgetary relations should be an efficient mechanism for building fiscal federalism and the national economy as a whole.

The meeting focused on improving the budget process, the division of spending powers and reduction of unfunded mandates, the division of taxation powers and income sources, the size and kind of tax revenues to local budgets, budget alignment and control over regional finances.

Heads of the regions, in particular, proposed to the Government to add several amendments to decisions related to federal debts for regions, community charge debts of federal structures situated in the regions, and increasing salaries in the public sector.

After the meeting, Mr Putin instructed the Government to incorporate the suggestions in preparations for a meeting of the cabinet on approving the program of the development of fiscal federalism until 2005.