Page 99 - RusRPTNov23

self-employed people working in new Russian regions over the next few years. "One instruction concerns the implementation of measures to support SMEs and the self-employed in the Donetsk, Lugansk people's republics, Zaporozhye, and Kherson regions in 2024-2026," the government press service said in a statement. Relevant departments should also work on offering preferential financing to small technology companies until February 1, 2024.
The government has limited access to subsidised loans in the middle of October. The increase in the key rate forced the government to think about changing the rules for subsidizing industry, writes Kommersant. The Ministry of Finance proposes to introduce an upper limit on the rate above which the budget will not subsidize preferential loans, and the Ministry of Industry and Trade proposes to completely eliminate the key rate when calculating fines for non-compliance with requirements. Both draft amendments were published on the same day.
The Ministry of Finance directly indicates that the ceiling on the final rate on loans subject to subsidies was required to minimize budgetary risks due to loans that enterprises take out at a floating rate. The Ministry writes in its justification that the change will not affect the achievement of the goals of state programs, but this is unlikely to be the case: the attractiveness of preferential programs will clearly decrease.
The Ministry of Industry and Trade is solving another problem related to subsidized leasing for industrial enterprises, especially in light industry. Sanctions and delays in the supply of equipment objectively lead to failure of obligations by recipients, but no one has canceled fines for late payments (linked to the growing key rate). The Ministry proposes to replace them with the return of subsidies to the budget, and only in part of unmet obligations.
The programs mentioned are small in scale - tens of billions of rubles - and, moreover, subject to sequestration. But they are important for industries and for understanding the logic of government actions in the new conditions.
Firstly, tightening the terms of subsidies is another channel for the negative impact of an increase in the key rate on the real economy. The current trajectory of inflation almost guarantees that the Central Bank will raise rates again next Friday - and by no less than a percentage point.
Secondly, the growth of obligations to support business (adopted when rates were still low) stimulates the government to optimize the model of budget subsidies as a whole. The departmental approach to priorities may finally be replaced by “technosovereignty”, and the distribution of subsidies and grants will become uniform. On the scale of the entire budget, we are already talking about a huge amount of 1.9 trillion rubles per year, competition for which will
99 RUSSIA Country Report November 2023 www.intellinews.com