Russia’s Finance Ministry proposes steep budget cuts of state programs

Russian state programs will get less funding in 2016.

Ship building, space program and development of the Far East are the biggest losers in the ministry’s proposal to cuts in state programs.


Russian Finance Minister Anton Siluanov has warned that the country would face no choice but to rein in public spending over the next few years.

Russia entered a state of economic crisis by last year’s sharp drop in oil prices, Western sanctions for the annexation of Crimea and alleged support for rebels in eastern Ukraine, the following Russian counter-sanctions, causing sharp falls in the value of the ruble currency.

In a proposal to cuts in state programs for 2016 presented to Prime Minister Dimitry Medvedev on Tuesday, the ministry suggests that the programs covering public financial management and regulation of financial markets, domestic politics, and social support to citizens, should be the government’s priorities for 2016, and therefore be saved from the hardest cut-backs, RBK reports.

Of the state programs that will have to endure the largest cuts if the ministry’s proposals are approved, is the plan for social and economic development of the Far East and Baikal region. This program will get 18.2 billion rubles (€328 million), which is 70 percent less than in the current budget.

The state program for development of Russian ship building in the period 2013-2030 will have to do with 7.2 billion rubles (€129.8 million), or 61.6 percent less than in the current budget. The ambitious program was adopted in November 2012 and incorporates both development of civilian ship building and state support for the implementation of the state’s naval shipbuilding program.

The Federal Space Agency Roskosmos looks set to lose 31.5 percent of its budget next year, with a total spending of 155.9 billion rubles (€2.8 billion).