The Draft of the Federal Budget was Submitted to the State Duma

Comparison of the version submitted to the Russian parliament with the previous one published for anti-corruption due-diligence on September 19 at the single website of disclosure of the information on development by federal executive authorities of draft regulatory legal acts and the outputs of public debates on those acts showed that within 10 days the volume of the draft document increased considerably (by 123 pages). Some financial indices were changed as well, for example, the total federal budget expenditures rose in 2015 (+Rb 300) and 2016 (+RB 638) with a simultaneous reduction of their public (open) part by Rb 338m, Rb 3, 537bn and Rb 6,540bn in 2014, 2015 and 2016, respectively.

In addition to the above, deletion fr om the text of the draft law in Article 7 (10) of one of the 15 definitions of the competence according to the formula "has the right" can be regarded as a result of the above anti-corruption due diligence. It is to be believed that according to the opinion of the architects of the above draft law the remaining 14 instances which were left untouched can be attributed only formally to curruptogenic factors.

 

No secret, the existing Methods of Carrying Out of Anti-Corruption Due Diligence of Regulatory Legal Acts and Draft Regulatory Legal Acts approved by Resolution No. 96 of February 2010 of the Government of the Russian Federation on Anti-Corruption Due Diligence of Regulatory Legal Acts and Draft Regulatory Legal Acts do not take into account such specific currptogenic factors in state finances as are related to a lack of transparency in budget documents, illegitimate classification of such documents, as well as misinterpretation and discriminatory fulfillment of laws.

 

Due to the above, a deep concern is caused by the above redistribution of the share of open federal budget expenditures in favor of classified ones. As compared to the current fiscal year, the draft budget provides for growth in the share of classified expenditures by more than 10 p.p.in 2016 to a quarter (24.8%) of all the federal budget expenditures (4.7% of GDP!). It looks like an explicit anachronism as compared to developed countries wh ere the share of classified expenditures in budgets of central governments does not exceed 1%. Existence of classified expenditures in such subsections as 0501 Housing and Utilities (22.7%), 0701 Pre-School Education (6.1%), 0905 Sanitary and Recreation Assistance (13.8%) and 1103 Social Security of the Population (0.4%), discredit all the branches of government in Russia. It is obvious that none of those expenditures can be attributed to growth in defense procurement, while legitimacy of classification of the latter's expenditures causes much doubt as in the 2003-2005 period the main parameters of the defense procurement were published in the form of an open annex to the law on the federal budget, while in the current fiscal year they are published in the section of the law on budget related to the EMERCOM of Russia (!).

 

The share of classified expenditures in budgets of central governments in 2012, % Category

Transparency of the draft federal budget is further reduced due to both a lack of documents in the Excel format and the system of headings at the Website of the State Duma, which situation complicates search of the required documents. Probably, due to the above it was impossible to identify in the published documents the expenditures of the budget in accordance with the nomenclature of operations of the state governance sector (the economic classification of expenditures). Comparability of budget indices in accordance with Article 36 of the Budget Code is ensured by the architects of the draft law only in one of the supplements to the explanatory note which shows, on the one side, that they know how to do it, but, on the other side, that they, probably, do not want it.

 

Continued growth in the volume of the draft budget - by 54% within a year (from 4251 pages to 6549 pages) and low quality of accompanying materials whose data has sometimes nothing to do with the version which was submitted to the State Duma do not contribute to transparency, either. The main innovation of the submitted draft law related to adding of the program presentation of budget expenditures appears so far infeasible both due to a delay in development of the 31st state program - Ensuring of the Country's Defense Capacity - for the next year and dubious quality of target indicators of programs which have been already developed.

 

Aggregation of the structure of items of target expenditures (a 75% reduction) made things simpler for the architects of the draft budget, but complicated control over budget expenditures, while a strange entanglement of functional, departmental and program presentation of the budget makes one wonder about the purpose (or role) of traditional agencies. So, 49 government departments, services and agencies are engaged in fulfillment of the country's defense plan; as regards the above 31st state program "only" 38 state agencies receive budget funds; 28 state agencies (including 18 agencies in accordance with a confidential procedure) receive funds allocated to the National Defense item. Do the above factors increase chances to carry out an efficient defense policy and achieve progress in fighting the corruption or set the country in a dangerous direction?

 

At present, decisions aimed at upgrading of transparency of the draft federal budget which was submitted to the State Duma will be the most difficult and nearly infeasible ones. The People's Budget alone is unlikely to solve the problem.

 

V.B. Zatsepin, PhD (Military Science), Head of the Economics of the Military-Industrial Sector Department