Georgy Malginov on property policy in the context of the draft federal budget for 2025–2027

A significant difference from similar documents for previous years is the variability of the values quoted. While Section II of the Explanatory Note (Main Characteristics of the Draft Federal Budget) states that federal budget revenues from privatization of federal property are expected to amount to Rb5.5 bn in 2025, Rb5.6 bn in 2026 and Rb25.5 bn in 2027, Section VII (Sources of Financing the Federal Budget Deficit) contains data on the volume of federal budget revenues in 2025–2027 in the amount of Rb2,339.6 mn annually. Thus, the amounts of funds from privatization of federal property given in the explanatory note to the draft federal budget differ approximately 2.3–2.4 times for 2025–2026 and by a wide margin (11 times) for 2027.

Explanations can be found in the Data on the forecast plan (program) of privatization of federal property for 2025–2027, where it is stated that annual revenues from sources of financing the federal budget deficit in terms of proceeds from the sale of shares and other forms of participation in the capital owned by the federal government are projected in the amount of 2,339,578.7 thousand rubles, excluding the value of shares of major companies. And in the calculation by items of the classification of sources of deficit funding for each annual period two values of indicator of funds from this source are given. In addition to the above-mentioned annual constant values, a separate line shows Rb3,115,767.9 thousand in 2025 – Rb3,228,775.0 thousand in 2026, and Rb23,146,495.8 thousand in 2027. If the difference between the values of 2025 and 2026 is small (less than 4%), the value of the indicator in 2027 will exceed them by more than 7 times.

Meanwhile, the annual volume of revenues stated in the current version of the projected privatization plan (PPP) for 2024–2026 is only Rb1.2 bn that allows us to state that the projected revenues will increase approximately twice without considering the value of shares of the largest companies. And if we consider potential revenues with this factor considered, the growth will be much higher. At the same time, no specific companies privatized based on special decisions of the President of the Russian Federation and the Government of the Russian Federation are not mentioned in the data on the projected (program) of privatization of federal property for 2025–2027. For comparison: in 2023, the total amount of funds from the sale of shares and other forms of participation in capital owned by the federal government amounted to Rb27.3 bn.

Based on the assumption that we can conclude not only that there is a high probability of execution of the planned budget projections, but also that certain additional opportunities are reserved for the purpose of potential proceeds from privatization, especially towards the end of the budget cycle. At the meantime, the role of privatization proceeds for funding the federal budget deficit will be minimal even if the largest amounts from this source are taken into account. In 2025–2026 they are expected to amount to no more than 0.2% of the amount of funds expected to be raised under government borrowings, and in 2027 – 0.7%.

In 2025, proceeds from the use of public property are projected to amount to Rb2,035.7 bn. An important source of these revenues are dividends, which in 2026–2027 should become the most significant item of income under this section (more than 41–42%) against 38.6% in 2025, when they give way to revenues from balances on the federal budget accounts and from their placement, except for the National Welfare Fund (NWF).

In 2025, the federal budget is forecast to receive Rb786.4 bn of income in the form of profit attributable to shares in the authorized (share) capital of business partnerships and companies, or dividends on shares owned by the state (including dividends of Sberbank), which is about Rb30.6 bn more than expected in the current year. In the next two years, the dynamics is progressive: a barely noticeable 0.3% increase in 2026 is followed by a rather tangible 5.8% one a year later. Dividend income in 2027 is 6.1% higher than in 2025, exceeding the 2024 estimate by 10.4%. The achievement in 2025–2027 of values of about Rb0.8 trillion, exceeding the real maximum in 2022 (Rb753.5 bn), raises certain questions, especially against the background of a more than twofold reduction in dividend payments to the budget in 2023. Their absolute value (Rb339.1 bn) corresponded to the level of 2021, yielding to the indicators of 2019–2020.

The same type of federal budget income from the use of state property in the form of material assets (leasehold payment for land and property, transfer of profits of unitary enterprises) is of a supplementary nature.

When considering ownership relations from the point of view of expenditures, it should be noted that from the end of 2020, these issues were assigned to the State Program (SP) “Public Finance Management and Regulation of Financial Markets” supervised by the Ministry of Finance of Russia, which includes the subprogram “Management of Federal Property”.

In the new draft federal budget, the funding of the above-mentioned State Program is presented in the context of federal and departmental projects, as well as complex of process measures (CPM). One of the latter is the CPM “Management of Federal Property”. The allocations envisaged by the draft law will amount to in 2025 – Rb7,969.5 mn, in 2026 – Rb7,729.4 mn, and in 2027 – Rb7,893.5 mn. The year-on-year dynamic of expenditures on the implementation of CPM shows that a significant (by 16.9%) increase in expenditures in 2025 compared to the level expected in the current year will be replaced by a slight reduction (by 3%) in 2026, followed by a 2.1% increase in 2027, which will result in exceeding the 2024 values by 15.7%. The list of departmental projects (DP) also includes the DP “The State as an Efficient Owner”. However, the draft law on the federal budget for 2025–2027 does not provide for its funding, concentrating all the volumes within the framework of the CPM “Management of Federal Property”.

If we consider its implementation as the next stage in the implementation of the State Program “Public Finance Management and Regulation of Financial Markets” in the subprogram “Federal Property Management”, it is worth noting the focus on the early achievement of the indicators of the State Program. In the current official version, its goal is to increase revenues from the management of federal property in general (by 2030 at least 2 times the level of 2021). The passport of the State Program “Public Finance Management and Regulation of Financial Markets”, which is present among the accompanying documents to the draft law on the federal budget, provides annual values of this indicator within the framework of the upcoming budget cycle with the achievement of a value of 202.5% to the base level of 2021 as early as 2025.