Cabinet Set to Ensure Fair Distribution of Budgetary Funds Among Regions

The Russian Cabinet of Ministers deems it necessary to reform the existing system of inter-budgetary relations and ensure fair distribution of funds among the regions. "If we fail to bring about changes in the inter-budgetary relations, the income gap between the industrially developed and less developed regions will keep widening," Russian Prime Minister Mikhail Kasyanov told reporters Tuesday.

Mr Kasyanov is currently on a routine visit to Rybinsk, Central Russia.

The premier described it as a "principled issue the Cabinet is going to consider in the near future." Tomorrow the Cabinet will look into implementation of the tax reform. Then prominent on its agenda will be the financial plan for the next three years. While discussing the financial plan, the Cabinet will have to dwell on federal allocations to the regions, as well as on the state of regional budgets," said Mr Kasyanov.

He said the Russian economy had learnt to earn money, to collect taxes. To distribute the collected funds is what it must learn now.

"The government must not build factories. This is what industrialists should do, while the government's responsibility is to build welfare facilities, i.e. hospitals, schools, etc. The Cabinet's objective is to ensure an utterly fair distribution of revenues, giving little heed to the donor-regions' complaints that they pay unfairly greater taxes," said the premier.