Putin's budget address revolutionary: economic expert

President Putin's address on next year's federal budget has a revolutionary content, said Andrei Illarionov, presidential economic adviser, as he was addressing the media in St. Petersburg.

The address may have sounded calm-but the measures Mr. Putin is offering will boil down to a budgetary revolution when implemented, what with fiscal rate cuts he deems necessary. Thus, value added tax is expected to come down from current 20% to 18% next year, and eventually to 16%. The unified social tax may drastically reduce in 2005, forecasts the expert.

In his address, President Putin gives a precise wording to a goal never posed in Russia before-to resolutely limit budgetary distribution of economic resources, which implies a budget revolution.

If Russia meets the targets the presidential message is posing, it will reach key national goals-higher living standards, combat against poverty, the gross domestic product doubled, and the defence potential spectacularly increased, said Mr. Illarionov.

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