The government approved a plan to cut budget spending by 450 billion rubles

The government approved the Ministry of Finance’s plan for frontal sequestration of the 2024 budget, a source close to the cabinet and a federal official told Vedomosti.

The agency plans to cut federal treasury spending on all unprotected items by 10%. The total amount of the reduction will be about 450 billion rubles, one of the interlocutors noted.

The decision to cut costs was made by the government’s budget forecasting committee. A source close to the government explained to the newspaper that the lack of protection meant mainly expenses for which there was no financial justification by calculations.

The representative of the Ministry of Finance pointed out that the final optimization amount has not yet been determined. The decision on which expenditure items to cut and in what amount will be made by budget planning entities together with the supervising deputy prime ministers, he specified. At the same time, spending cuts will not affect budgetary spending on the social sector, payment of salaries to state employees, inter-budgetary transfers and other protected items, stressed the representative of the Ministry of Finance. The funds saved in this way will be used to finance priority government expenditures.

Frontal reduction means a uniform reduction of expenditures in all ministries and ministries – explained the head of the finance ministry in an interview with Arguments i Fakty. “There are also targeted reductions when individual events are canceled or postponed for an extended period. But it is very important to understand that the frontal reduction concerns expenses that are not of a social nature, which not only do not decrease, but, in principle, increase, ”the minister noted.

The main task of the department for next year is an unacceptable budget deficit, emphasized Siluanov.

The deficit, which had been growing since the beginning of the year, decreased in June. In the first month of summer, it fell to 2.595 trillion rubles, although a month earlier it was 3.411 trillion rubles. Thus, the “hole” in the treasury accumulated since the beginning of the year decreased by almost a quarter, and in the first summer month the state treasury received a surplus of 816 billion rubles.

The deficit was reduced by cutting spending, not increasing revenue. Budget expenditures amounted to 1.747 trillion rubles – 15% less than in May (2.023 trillion) and 35% less than the five-month average (2.645 trillion).

At the same time, the situation with oil and gas revenues has not improved – they remain noticeably lower than a year ago: 529 billion rubles in June compared to 571 billion in May and 718 billion in the same month of 2022.

Siluanov said in mid-July that there are no serious threats in this year’s budget – there will be money for all planned tasks. However, additional funds will be needed for the next three years, so the state is preparing to “mobilize” the federal budget.