The most problematic regions of Russia got stuck on the “budget needle”, treating state funds as a free source to solve their problems, the newspaper “Izvestia” with reference to National rating Agency (NRA).
Recall that in this year was recorded seven times the income gap regions of Russia. When the condition of a constant tax policy, the share of transfers in budget revenues will decline 1% per year, which will lead to an increase in inequality in the future.
Recently, however, significantly changed the structure of liabilities of regions: market loans with great speed is replaced with debt to budget commercial loans regions give banks (interest rate is at least 10% per annum), and budget loans to the regions receive from the Federal budget under 0.1% per annum (the mechanism similar to the intergovernmental transfers).
If the Ministry of Finance, this situation is tired, the chronic problem of public debt of regions can be malorazlichimyh, according to the NRA.
“The main element of the national debt become a budget loans: if at the beginning of the year, they accounted for about 34,88% of the total public debt of regions, in September this figure increased to 48,95%”, – stated in the study.
At the Federal level, the goal of reducing the cost of debt for the regions. This goal is achieved by replacing commercial loans budget loans (bet on them).
“Among the regions combining the budget deficit, high public debt, is dominated by regions with low economic potential and low investment attractiveness. Such regions are traditionally financially dependent on the Federal center”, – emphasized in the review of the NDA.
About the danger of replacing such a situation recently, said the Chairman of the accounts chamber Tatyana Golikova at a meeting on the debt load of regions. In her opinion, the reduction of the debt market indicates a deterioration in the structure of state debt of constituent entities of the Russian Federation.
In the end, there’s not much left of the RF subjects, in the structure of the debt which occupy a significant share of Bank loans.
According to the new wording of the Budget code, effective from 2019, the subjects of the Russian Federation will be divided into three groups: those with high debt sustainability (regions, whose debt is less than 50% of budget revenues), medium debt sustainability (debt 50-85% of revenues) and subjects with low debt sustainability. From this point of view, the NRA and analyzed the state of Russian actors. The picture is disappointing.
If the rules of the new Budget code was in effect already, by the beginning of September 2016, only 14 regions would fall in the low debt load (not more than 25% of budget revenues). This is Sevastopol, Republic of Crimea, Saint-Petersburg, Moscow, Khanty-Mansi Autonomous Okrug, Bashkortostan, Sakhalin, Tyumen, Vladimir, Leningrad, Irkutsk region, Altai, Perm and Primorsky Krai.
At the same time 25 (almost a third) of all 85 regions would belong to the category of regions with low debt sustainability. And 14 of them, noted in the NRA, broke the agreement on the provision of budget credits with the Ministry of Finance.
The worst things in Mordovia, Khakassia, Kostroma oblast, North Ossetia, Astrakhan region, Kalmykia, Karelia, Mari El Republic, Zabaykalsky Krai, Pskov, Kirov, Smolensk and Kaluga regions, as well as in Karachay-Cherkessia. In these regions the ratio of debt to budget revenue exceeds 100%.
Of the 25 regions with a debt load of over 85% of revenues in 2016 to reduce the national debt was only three, two managed to keep the status quo. In the remaining 20 commitments continued to grow. The solution to the problem of public debt in these regions will soon be absolutely impossible without drastic measures from the Federal centre.