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Russian budget with tough austerity measures okayed
MOSCOW. Jan 25 : Russia • government won approval from parliament for tough economic austerity after a senior official warned of possible financial catastrophe, reports Reuter.
"I am not trying to frighten you. I am just Informing you of the realities of life. Deputy Prime Minister Yegor Gaidar said before parliament gave grudging approval to a budget law for the first quarter of this year.
Gaidar said Russia depended on Imported grain supplies, which it could not afford without support from foreign creditors and the International Monetary Fund (IMF).
Gaidar. President Boris Yeltsin's top economic strategist. said support from abroad was conditional on Russia's commitment to reforms notably price liberalisation and efforts to reduce a budget deficit that amounted to 108.4 billton roubles (about one billion dollar at the Russian central bank rate) in 1991.
The new law stated that the government not parliament, would be responsible for the budget, which set expenditure and revenue at 420.5 billion roubles (about four billton dollar).
AP earlier adds : The reforms have increased prices in food stores several times Bare store shelves have not filfed. and consumers 'are angry. At the same time. Yeltsin's government is trying to sharply cut backrthe number of roubles
Virtually unrestricted printing of roubles in the final years of Soviet rule built high inflation into the economy.
Gaidar, tn remarks reported by the Tass news agency, said the government was determined to press ahead with its reform.
He said there had been only one choice -- to sharply restrict the money supply and raise prices. .
Despite public protest, raising prices was 'the only pos
slble and responsible decision.* Tass quoted him as saying. "Any other policy could have been extremely dangerous. dooming us to an automatic twist tn the Inflationary spiral.”
Even so, he said the budget built In an assumption that inflation would be 400 per cent. He termed that estimate 'extremely conservative.' Tass said
Gaidar said total military expenditures would be cut 4.5 per cent, but within the military budget, outlays for new equipment would be 7 1/2 times smaller
He also announced tuts In other government outlays. In eluding projects carried out with credits from foreign governments unless they guarantee immediate results. Cuts of between 2.7 per cent and 9 per cent were announced In subsidies for industrial and farm products, and in law en-forccment.
But the budget ran into
immediate criticism from Alexander Pochinok, chairman of the legislative committee on budget, planning, taxes and prices.
He said the government should be given the authority to spend 5IB.8 billion roubles, bui that the documents presented to the legislature were far from representing s real budget.
The quality and level of the documents presented do not permit them to be considered a budget." Tass quoted Pochinok as saying. For Instance. they did not take Into account such Items as social protection of the population, converting defense industries and periston funds.
Pochinok accused Yeltsin's government of trying to push off all responsibility for the living standards of people on local governments, and charged that it Is "willingly or unwillingly pushing ahead the disintegration. the regionalization OF Russia.