Photo: Alexander Ryumin / TASS
Ombudsman for entrepreneurs Boris Titov presented the final version of the program “Strategy of growth” of the Stolypin club. The program promises a large-scale stimulation of the economy for trillions of rubles
The Stolypin club presented the final version of the program “Strategy of growth”, at the time resonated for proposals to run a “target issue money” in the trillions of rubles. The head of the expert platform, the business Ombudsman Boris Titov on Wednesday, March 1, identified several key areas that, according to “Stolypina”, will help Russia to increase the pace of economic growth to 6% by 2020. The authors of the strategy suggest that the government and the Central Bank to invest in the economy of 7.5 trillion over five years.
During the presentation of the program Titov stated that the plan sent to the President and the government, the correspondent of RBC
To let go of the debt and the deficit
First Stolypin club insists on the transition to a “moderately soft” monetary policy. The Central Bank should lower its key rate to the level of “inflation + 2%” (now this would give the rate of the Central Bank 7% against the existing 10%. — RBC), but in General, the monetary authorities should not only target the price increase, but also focus on the achievement of other targets, such as GDP, the exchange rate, high performance workplaces. Targetarea inflation, the regulator should establish a benchmark that will not deter economic growth, say the authors of the program. The budget deficit, according to the concept of the Stolypin club, should be set at maximum 3% of GDP, whereas now the government seeks to reduce the deficit to 1.2% by 2019.
Another proposal of the “growth Strategy” — setting a limit on the level of debt in the amount of 30-35% of GDP. By the end of 2016, the national debt was 13.6% of GDP, follows from the data of the Ministry of Finance. This means that the Stolypin club sees a space for increasing the national debt by tens of trillions of rubles in comparison with the current level.
Finally, the program Titov and his associates implies the use of measures of “soft” currency regulation in times of “extreme volatility” of the ruble. Speech, for example, limiting foreign exchange positions of banks, the obligation of exporters to sell foreign exchange earnings, etc. Now Russia has a regime of floating ruble exchange rate. But the Finance Ministry in February began buying currency on the open market to contain excessive volatility.
To give the economy credit
Other unit of measures of the Stolypin club, to provide long — term credit to the economy at competitive rates. All joint program of the Bank and the government in support of economic growth will require 1.5 trillion rubles per year and will last five years, suggest the authors of the program. Central Bank needs to create new development institutions (700 billion roubles annually), to improve the mechanisms of state guarantees and to abandon the mass withdrawal of licenses from banks, parallel to the insured deposits of legal entities in the amount of up to 1.5 million rubles (similar to individuals). The creation of a “Bank of bad debts” will cost 450 billion roubles annually.
Government should stimulate private productive sector of the economy, according to the program, in the first stage this will require 520 billion rubles per year. These measures include the program of the mortgage under 5% per year (150 billion rubles), subsidies for medication and food for vulnerable citizens (170 billion rubles), encouraging the purchase of Russian vehicles and other goods (200 billion roubles), support of export, etc. Another suggestion is improving the efficiency of infrastructure and resource monopolies and, as a consequence, the reduction of tariffs. The authors of the “Strategy growth” is calculated, for example, that the electricity tariff will be reduced by 27.8%.
Less taxes, more independence of judges
Finally, a separate section is devoted to tax reform. In the first stage of the Stolypin club proposes to reduce the tax burden on new and dynamic industrial enterprise, to give them five-year tax holidays and incentives. The second stage (starting from 2020) provides for the reduction of direct taxes on production with the growth of indirect taxes and taxes on natural resource rents. A similar format is now considered the Ministry of Finance and economic development. One of the main ideas — the increase in VAT from 18% to 21% while reducing insurance premiums from 30 to 21%, say sources RBC. According to the plan Titov and his associates, the tax burden overall should not exceed 35% of the profits of the business. Now, the average is 47,4%, according to PwC.
Among other initiatives, legal issues. The Stolypin club insists on judicial reform (strengthening the independence and accountability of judges, reducing the burden on them, getting the Supreme court the power to override the decisions of the courts, “roughly violate the norms of substantive law”). Experts traditionally require to reduce the administrative burden on business by limiting the number of planned inspections of two per year and strengthening the responsibility for the deliberate obstacles of entrepreneurial activities. It is proposed to reform the criminal and economic legislation in General, the authors want to restrict the searches to the criminal case, to equate a year in jail to two in the colony, to forbid to consider the merits of the case to the judges, which established the defendants measure of restraint.
Where to get the money on the economy
In 2017-2018, the government should spend to stimulate growth of GDP of 2.2 trillion rubles, proposed in the program (1.5 trillion rubles in loans to the economy at competitive rates, 520 billion rubles on stimulation of demand and 139 billion by saving costs at the level of last year).
The state has the money, said the Stolypin club. Up to 1.5 trillion rubles can be found through financing by the Central Bank of capitalization of institutes of development and new refinancing facilities (for example, project and trade Finance). Still the same and will help to find borrowing and larger budget deficit. Other possible instruments borrowings among the population, privatization, etc.
Government should become a “catalyst for the investment process,” reads the document. To update the fixed assets needed to 5.9 trillion rubles in the prices of 2015, but for each state ruble will come 4-5 rubles from the business, predict the authors of the program. Thus, the share of investment in GDP is expected to grow from 21.3% in 2015 to 28-30% in 2025-M.
Two years presentations
Titov will present his program was not the first time — he several times represented it in 2015 and 2016. In parallel, the government is preparing a Comprehensive plan for the growth of the economy for 2017-2025. Also the reform program under the guidance of former Finance Minister Alexei Kudrin thinks of the Center for strategic research (both document will present in may). The reform will begin after the presidential election in 2018, according to Kudrin. The Stolypin club to implement the change proposes to establish a “headquarters of reform”, the head of which will receive the status of first Deputy Prime Minister for development.