Friday, March 20, 2015

Duma wants to abolish indexation of salaries of civil servants – BBC Russian

  • March 20, 2015

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The Finance Ministry believe that the indexation of social payments to citizens during the crisis only leads to a continuously ongoing inflation and deterioration in the economic situation in Russia

State Duma adopted in the first reading of a government bill, which proposes a freeze in 2015 indexation of salaries of civil servants, military personnel, judges and prosecutors.

“We are quite tough offer approach to categories such as civil servants, soldiers, judges. We offer this year in the absence of real financial resources to skip indexing for these categories, “- said in the State Duma, Finance Minister Anton Siluanov.

Also on the bill, on the proposal of Deputies, provides indexing of “key social payments and benefits” at the level of 5.5% – that is, at the level of price growth, which was projected before the sharp deterioration in the economic situation in Russia.

Now the salaries of civil servants and social benefits are indexed in accordance with the projected rate of inflation, which is set by law on the federal budget . The amendments to the federal budget, submitted to the Duma in mid-March, the forecast rate of inflation in 2015 is set at the level of 12,2%.

“It is proposed to the current indexation suspended for one year, and key social benefits enter another indexation – in two stages, “- explained the head of the Committee on Labor and Social Protection Olga Batalina.

Thus, the indexing key social payments in 2015 will be held twice: first at the previously projected rate of inflation in 5 , 5%, and in early 2016 will be held doindeksatsiya before the actual rate of inflation in 2015.

Wages and Inflation

In February, a proposal not to index salaries and social payments in 2015 gave the Ministry of Finance. Then the Russian Finance Minister Anton Siluanov explained that such measures are necessary in order to facilitate the budget of the current and subsequent years and do not stimulate consumption and additional demand, including for imports.

“It is caused, of course, the fact that we see the economy compared with those projections, we did some time ago, changed deteriorated. worsen the situation with the budget in terms of the formation of the revenue base, sharply increased the budget deficit, “- said the minister.

According to Siluanova if Russia will be indexed to inflation all the new benefits and salaries, the country “will never cope with inflation”.

In an updated forecast of Ministry of Economic Development in February, said in particular that the Russian economy is entering a period of prolonged recession. Office predicted a significant reduction in investments, real incomes, and rising unemployment.

Earlier, the revision of the growth forecasts for the Russian economy according to the World Bank and the European Bank for Reconstruction and Development.

The reasons Revisions bank experts call the fall in oil prices, the conflict in eastern Ukraine, and imposed sanctions on Moscow because of the events in Ukraine.

On Thursday, the director of the Department of the Treasury long-term strategic forecasting Maxim Oreshkin also said that the indexation of social payments citizens during the crisis leads to a continuously ongoing inflation and worsening economic situation in Russia.

“The mechanism of the transition from a one-time permanent inflation will be indexed. Following the rise in prices begin indexed budget expenditures, salaries, social payments, and it leads to the fact that inflation becomes permanent. And, as practice shows, the indexing of the same social spending and salaries do not actually protects and leads only to a serious deterioration of the situation “, – said Oreshkin at a meeting of the State Duma Committee on Economic Policy.

In the example cited the situation Oreshkin 1998-1999, when there was an attempt indexation of pensions and other benefits, and “this has led to a surge in inflation to 100%”.

“We’d better get the money now send to subsidize interest rates in the industry, to support the industry. If we will index wages, and the enterprise will fall – it will be much worse for the economy “, – says Anton Siluanov.

However, the first deputy head of the Duma Committee on Budget and Taxes Oksana Dmitrieva said that the government receives conflicting decisions .

Conflicting decisions

“We have before us a set of contradictory actions. Absolute nonsense – send money to subsidize loans to enterprises, first raised his key rate, which led to a sharp rise in the cost of loans! Help with credit must be by reducing the key rate of the Central Bank. And if you decided to give subsidies for loans, then why not send for this purpose budget surplus last year? But our government has already given the 1 trillion rubles to banks! We are told that the indexation of pensions and social benefits increases inflation and does not increase the inflation trillion, give the bank? “- Said in an interview with” MK “Dmitriev.

According to her, the abolition of the indexation of social payments could bring down the purchasing the ability of the Russians and make a way out of the crisis more difficult.

“We have a crisis, inflation, production cuts, rising unemployment, and all this leads to a decrease in quality of life and reduce consumption. Under such conditions, reduce the purchasing power of the population can not be more artificial, it is harmful. How, then, to stimulate the production of goods and services? “- Says Oksana Dmitrieva.

According to the adopted in the first reading the bill, it is proposed not to index payments for citizens exposed to radiation at the Chernobyl nuclear power plant, and as a result of nuclear tests at the Semipalatinsk test site .

5.5% will be indexed scholarships, grants disabled persons, persons with children, the Heroes of the Soviet Union and Russia, the heroes of labor, veterans and citizens exposed to radiation. There will also be indexed benefits paid case of death or injury to the police, army, customs officers, the penal system, the Federal Service for Drug Control and Fire Service.

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