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Russia: Duma Rejects Government's Budget In First Reading

Moscow, 11 October 1996 (RFE/RL) -- Russia's State Duma today rejected the government's draft 1997 budget in a first reading by 280 to 33, reports Itar-tass.

Legislators must now decide whether to order the government to present a new draft within 20 days, or to set up a conciliatory commission to settle the dispute. Members of both houses of the Russian parliament -- State Duma and Federation Council -- as well as government representatives would be part of any commission.

The Duma's debate on the government's 1997 draft budget began today with the majority of deputies calling for rejection of the draft. Some called it an "unrealistic" proposal.

Finance Minister Alexander Livshits, who presented the draft, told deputies that the government was determined to push through its austerity policies. But he added that there is plenty of room for constructive criticism from the Parliament to improve the draft bill.

Economics Minister Yevgeny Yasin said that despite the "very serious" state of the Russian economy, the country could not turn back from the path of monetary stringency.

The budget has come under heavy criticism from communists and nationalists dominating the Duma. They say the document contains spending cuts in the military and public sector that are too severe. Duma Deputy Speaker Alexander Shokhin -- a member of the pro-government Our Home is Russia faction -- said the present draft of the budget has no chance of getting through the house.

The budget, continuing the tough policies carried out by Prime Minister Viktor Chernomyrdin during the past two years, is aimed at bringing down annual inflation in 1997 to about 10 percent, and reducing the spending deficit to little more than 3 percent.

President Boris Yeltsin said today he has created a special commission to improve tax collection, to be chaired by Chernomyrdin. In a brief radio address from the Barvikha sanatorium outside Moscow, where he is preparing for heart bypass surgery, Yeltsin said that improvement of weak tax collection is a priority for Russia. And he said that widespread failure to collect taxes is largely responsible for the government's inability to pay pensions and wages to state-sector workers.

Itar-Tass quoted Chernomyrdin as saying in the southern city of Astrakhan that the commission on tax collection will meet for the first time next week. He also said that the government is ready to set up a conciliatory commission with the Duma to deal with disputes on the 1997 budget.