"Get out of the demographic trap": Vladimir Putin announced the expansion of the program of maternal capital

The maternity capital program in Russia will be expanded. This was announced on Wednesday, January 15, by Vladimir Putin in his annual address to the Federal Assembly.

“Today, there are almost 147 million people in Russia, but the country has entered a tense demographic period,” the president emphasized. According to him, the birth rate (number of children per woman) remains low for Russia and in 2019 stopped at around 1.5. The Russian leader described the situation in this area as difficult.

“The current negative forecasts cannot but alarm us. Our historical responsibility is to answer this challenge and not only get out of the demographic trap, but also by the middle of the coming decade to ensure a steady natural increase in the country's population. In 2024, the birth rate should be 1.7, ”Putin said.

In particular, the president proposed giving families the right to receive mother capital in the amount of 466 thousand rubles already at the birth of the first-born. Moreover, the amount of payment when the second child appears is planned to be increased to 616 thousand rubles. The announced measures should come into force on January 1, 2020, and the material assistance program for families should be extended for at least five years.

“Now this program is designed for the period until December 31, 2021. We will extend this program until at least December 31, 2026, ”Putin said.

As the president reminded, today, at the birth of a third child, the state repays part of a mortgage loan for a family in the amount of 450 thousand rubles. Thus, after the introduction of the announced measures, families with three children will be able to send over 1 million rubles to solve the housing problem.

According to Vladimir Putin, the most acute problem for the development of demography in Russia is precisely the low income level of citizens. According to the latest data from Rosstat, from January to September 2019, the share of the population with incomes below the subsistence level increased from 13% to 13.1% compared to the same period in 2018. As the president noted, about 70-80% of low-income families are families with children.

In addition, the president also proposed providing for benefits for children aged three to seven years. These funds will be able to get families with income below one living wage per person. The amount of benefits will be 5.5 thousand rubles. Moreover, if even after these payments the income does not reach a living wage, the amount of assistance will increase.

“We will have to understand and evaluate how this system works, if we see that some families do not reach the subsistence level, receiving 5.5 thousand, we will take the next step - we will pay in full from next year, this is 11 s an extra thousand, ”Putin said.

The announced measures will not only help to improve the demographic situation, but will also positively affect the Russian economy over time. Georgy Ostapkovich, director of the Center for Market Research at the Institute for Statistical Studies and Economics of Knowledge, HSE, spoke about this in an interview with RT.

“For almost three years now, we have been witnessing the predominance of mortality over fertility. The country found itself in a demographic pit, which was predicted ten years ago. However, the announced measures should stimulate the birth rate. We will not see any immediate impact on the economy, but after 20 years the children born now will be among the employed, and the positive effect will be manifested, ”the expert stated.

Business growth

Although the demographic situation in Russia remains difficult, Vladimir Putin generally positively assesses the state of affairs in the country's economy. As the head of state noted, today budget revenues exceed expenses, reserves fully cover external debt, and inflation in 2019 fell to 3%.

Nevertheless, one of the key economic challenges for Russia remains the situation with real incomes of the population. According to the Federal State Statistics Service, from 2014 to 2017, the indicator continuously decreased, and in 2018 it increased slightly - by 0.1%. From January to September 2019, the value increased by 0.8%. Meanwhile, the president still considers emerging growth insufficient.

“Now, relying on a stable macroeconomic foundation, it is necessary to create conditions for a substantial increase in real incomes of citizens. This is the most important task of the government and the Central Bank. Structural changes in the national economy and an increase in its effectiveness are needed to solve it, ”Putin said.

According to the head of state, in 2021, Russia's GDP growth rates should be higher than world ones. To achieve this goal, the president considers it necessary to launch a “new investment cycle”. Thus, the annual increase in investment in the economy should be at least 5%, and the share of investment in GDP should be increased from the current 21% to 25% in 2024.

As one of the measures to stimulate investment, the authorities have already agreed not to change taxes for business for six years. So it will be easier for entrepreneurs to build long-term investment plans. At the same time, Putin called on the Cabinet and Parliament to expedite the adoption of the bill on the protection and promotion of investment, and also announced measures to stimulate business in the regions.

“Today, the subjects of the federation have the right to provide the so-called investment tax deduction - a three-year benefit for income tax. But they rarely use this opportunity, as regional budgets lose revenue. In this regard, I propose to compensate the regions for two-thirds of their shortfall in income from applying the investment tax deduction at the expense of federal funds, ”the president said.

The head of state also called for the completion of the reform of control and supervision activities. So, the previous regulatory framework should be terminated and a new clear system of requirements for entrepreneurs should be created.

As Vladimir Savchenkov, Director General of APRI “Fly Planning” explained in an interview with RT, the measure will reduce the number of delays in paperwork and speed up business.

“In a situation where business is running quietly, the number of jobs is increasing, real incomes of the population are growing. Entrepreneurs are more willing to open a new business, fueling the territory with taxes, ”said Savchenkov.

In his message to the Federal Assembly, the head of state also drew attention to the problem of criminal prosecution of entrepreneurs under "economic" articles in connection with private accusations of organizing criminal communities. Vladimir Putin has already made appropriate amendments to the State Duma. So, law enforcement agencies "will continue to be required to prove that the organization, company was originally deliberately created for illegal purposes."

“The statements made by the president regarding both accelerating the adoption of the bill on the protection of investment and clarifying the articles of the Criminal Code for business will become prerequisites for improving the investment climate of the Russian Federation and may support business activity in the near future,” the chief analyst told RT BCS Premier »Anton Pokatovich.

At the end of his speech, the president also proposed introducing into the Constitution the provision that the minimum wage (minimum wage) in Russia should be above the subsistence level. The corresponding norm is already in force in the country, but the head of state considers it necessary to officially fix it in the main law.

Recall that from January 1, 2020, the minimum wage in Russia increased by 7.5% to 12 130 rubles. Note that each subject of the Russian Federation independently determines the minimum wage level depending on the cost of living in the region. Meanwhile, the indicator cannot be lower than the federal value.