Russian President Vladimir Putin approved the government’s plan to rebuild the economy after the coronavirus pandemic. The head of state said this on Tuesday, June 2, at a meeting with Prime Minister Mikhail Mishustin.
The Russian leader instructed the government in the second half of June to finally decide on the parameters of the plan and from the beginning of July to begin to take concrete steps. At the same time, the president called for long-term structural changes in the Russian economy and, above all, to focus on the well-being of citizens and Russian families.
“The strategic objective of such a national action plan is not only to stabilize the situation, without which, of course, it is impossible to move forward, but, most importantly, to support citizens, enterprises, business at the exit stage (from quarantine restrictions. - RT ),” Vladimir stressed Putin
According to Mikhail Mishustin, the plan contains about 500 events, and the cost of its implementation in two years will be about 5 trillion rubles. As the head of the Cabinet emphasized, the process of economic recovery will take place in three stages.
“The task of the first stage is to stabilize the situation by the end of the third quarter of this year. The main thing that needs to be achieved during this period is to prevent a further drop in people's incomes, ”said the Prime Minister.
The second phase will last until the II quarter of 2021. During this time, the authorities plan to complete the process of economic recovery, reduce unemployment and ensure the growth of citizens' incomes to a level comparable to 2019.
“At the third, final stage (these are the III – IV quarters of 2021), we expect to enter the trajectory of sustainable long-term economic growth. At the same time, we will reduce poverty and increase the number of citizens whose incomes will exceed the subsistence level. We will also do our best to ensure that the number of employees in small and medium-sized businesses reaches the pre-crisis level, ”Mishustin added.
- RIA News
- © Alexey Nikolsky
Recall that earlier the authorities approved three packages of measures to support the economy. In particular, we are talking about payments to families with children, increasing the size of unemployment benefits, granting credit holidays to the population and business, as well as soft loans and tax breaks for companies and entrepreneurs. The actions of the authorities allowed to contain a sharp decline in incomes and prevent an excessive increase in unemployment.
“A number of decisions already made to support citizens and enterprises were designed for the II quarter, so it is imperative that this work continues without pauses, and that the economy, employment, and income of citizens in the second half of the year receive serious, effective support for a confident recovery,” Vladimir Putin
Note that as a result of the consequences of coronavirus in 2020, Russia's GDP may decline by 5%. This statement was made earlier by the head of the Ministry of Economic Development Maxim Reshetnikov. According to the ministry, the deepest decline in the indicator will occur in the II quarter, after which the recession will begin to slow down. At the same time, the economic recovery plan prepared by the government implies entry to the GDP growth path of at least 2.5% by the end of 2021.
“Indicators of achievement of the goal of the National Plan (at the end of 2021): sustainable growth in real cash incomes of the population; reduction of unemployment to a level of no more than 5%; entering the trajectory of sustainable GDP growth at a level of at least 2.5% year on year, ”writes TASS with reference to the document.
In many respects, the revival of economic activity in the near future will depend on the rate of weakening of quarantine measures. 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.
“We will be able to see long-term growth of the Russian economy by October 2020, when all the restrictions introduced due to the pandemic will be lifted. Compensatory growth will begin, and by the end of 2021 we can see the indicator for GDP growth at 2.5%. This will be possible due to a restart of production, which will recover as consumer demand increases, ”the expert explained.
Work moment
In addition to the previously announced measures of state support for the unemployed and families with children, the economic recovery plan also provides for the creation of a “social treasury”. We are talking about a mechanism for providing assistance to citizens in an irresponsible manner.
“The new body will allow for better and targeted support to the population. We have many departments that calculate the losses from a pandemic, but there is not one that can quickly show who and how much money should be paid to support everyone in need in difficult times. Now money is allocated from different funds and budgets, which slows down the assistance process. The work of the “social treasury” will solve this problem, which will improve the situation of Russians affected by the crisis, ”explained Georgy Ostapkovich.
The authorities also plan to establish a minimum amount of hourly wages for hiring part-time workers for up to three months. According to TASS, the initiative is needed to “combat shadow pay” and protect “protecting the interests of employers”. At the same time, the government proposes to ensure the possibility of employees switching to a remote mode of work without concluding additional agreements to an employment contract.
“Transferring people to a remote location on an ongoing basis helps the company optimize its work process in the new conditions and at the same time protect the employee from unlawful dismissal. In general, the proposed measures to support the labor market will make it possible to reach an unemployment rate below 5% and keep the employment market in working condition, ”Ostapkovich added.
Business approach
In addition to the existing measures to support small and medium-sized businesses, the authorities propose to abandon the indexation of insurance premiums for individual entrepreneurs in 2021. In addition, the economic recovery plan proposes to establish a transitional tax regime for those who have lost the right to use the simplified taxation system. About this writes RIA Novosti.
“Small business found itself in the most difficult position during the pandemic. Some of the small enterprises were completely closed, while others worked in an abridged mode. All this hit the industry, which accounts for 20-22% of the country's GDP. At the same time, tax incentives and other exemptions allow entrepreneurs to go through a difficult time, as they give them the opportunity to restructure a business that, after a pandemic, will work in new conditions and under different rules of the game, ”said Georgy Ostapkovich.
The government also intends to extend until the end of 2021 a moratorium on scheduled inspections of small and medium-sized businesses. At the same time, it is planned to significantly limit the number of unscheduled inspections. As Pavel Sigal, First Vice President of the All-Russian Public Organization of Small and Medium Enterprises “Support of Russia”, told RT, the initiative will significantly accelerate business recovery after the pandemic.
“Such inspections usually record various violations of taxation or standardization of products, and this is always a stress for a commercial organization. Now, as a result of inspections, a lot of violations can be found for purely objective reasons: entrepreneurs were not able to fulfill the requirements of various bodies on time. Extending the moratorium on business audits removes this problem - companies can calmly pay taxes, collect the necessary documentation, permits, renew licenses, and no one will punish them, ”said Segal.
Rates down
In support of housing, authorities are counting on a decrease in the average mortgage rate in Russia below 8% in 2020. For this, the nationwide economic recovery plan includes the already existing preferential mortgage programs, as well as the allocation of state guarantees for the company DOM.RF in the amount of 50 billion rubles. As expected, the funds will go to buy new apartments from developers for subsequent sale at reduced rates.
According to RT, the director of the Skolkovo-NES financial center Oleg Shibanov, government measures will provide additional assistance to the Russians and will help support the demand for real estate in a pandemic.
“Lower rates significantly affect the desire to acquire real estate. As we understand it, per capita per square meter of housing in Russia is lower than in China. Therefore, the market is far from saturation, and any measures to support the population will have a significant impact on demand. Now even the best borrowers' rates are in the range of 8-10%, so their decrease will affect demand and support the market, ”concluded Shibanov.