Putin pledges over $126 billion in public spending as election looms

Russia's total budget spending in 2024 is planned at 36.6 trillion roubles, with military expenditure set to exceed social spending for the first time this year, as Moscow presses on with its war in Ukraine, now in its third year.

By: Reuters

March 11, 2024 07:18 PM IST

3 min read

Putin pledges over $126 billion in public spending as election looms

The announced measures could cost the budget up to 2 trillion roubles a year, estimated Dmitry Polevoy, head of investments at Astra Asset Management. (Reuters)

President Vladimir Putin is set to extend his 24 years as Russia’s paramount ruler in an election on March 15-17 and has promised more than 11.5 trillion roubles ($126.5 billion) in infrastructure and social spending over the next six years.

“This is the programme of a strong, sovereign country that confidently looks to the future,” Putin told Russia’s elite including lawmakers in a speech on Feb. 29. “We have both the resources and tremendous opportunities to achieve our goals.”

Russia’s total budget spending in 2024 is planned at 36.6 trillion roubles, with military expenditure set to exceed social spending for the first time this year, as Moscow presses on with its war in Ukraine, now in its third year.
The announced measures could cost the budget up to 2 trillion roubles a year, estimated Dmitry Polevoy, head of investments at Astra Asset Management.

Also Read | How the Ukraine war is changing the global arms trade

“At first glance, it does not look “unaffordable”, although in the case of a more negative economic situation than the authorities predict, this will require a search for additional sources of financing,” Polevoy said.
Sinara Investment Bank analysts said the measures imply significant fiscal stimulation of the economy, meaning an imminent tax increase is likely.

Putin has already hinted at raising the tax burden for wealthy individuals and companies.

Here are some of the spending promises Putin has set out in the run-up to the election:

INFRASTRUCTURE

4.5 trillion roubles for modernising public infrastructure such as housing and communal heating;
1 trillion roubles on the construction, repair and equipping of hospitals;
400 billion roubles to overhaul schools and kindergartens;
400 billion roubles on the construction of university campuses;
360 billion roubles for parks and public spaces;
250 billion roubles to modernise airport infrastructure;
150 billion roubles for renewing public transport;
124 billion roubles to overhaul universities;
120 billion roubles to repair and equip colleges;
120 billion roubles on constructing residential areas;
100 billion roubles to update the infrastructure of museums, theatres, libraries, art schools and cinemas;
66 billion roubles for buying school buses;
65 billion roubles for sports grounds.

SOCIAL SPENDING

Putin’s order to extend a preferential family mortgage programme will cost 1.5 trillion roubles over the next six years, according to the finance ministry’s preliminary calculations. Additional spending on the programme in 2024 will cost 260 billion roubles.
Deputy Prime Minister Tatiana Golikova said maternity capital programmes would cost an additional 600 billion roubles by 2030;
100 billion roubles on social payments for families with children;
At least 75 billion roubles allocated to regions with below average birth rates by 2030.

INDUSTRY AND TECHNOLOGY

700 billion roubles to create digital platforms in key economic and social sectors;
300 billion roubles to the Industrial Development Fund to support high-tech projects;
200 billion roubles to subsidize interest rates for industrial production projects;
120 billion roubles in subsidies to companies for scientific research and industrial mortgages;
116 billion roubles to access high-speed internet, build up satellites.