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Minimal Wages, Pensions to Be Increased in Russia in 2005


ITAR-TASS News Agency

August 23, 2004




MOSCOW, August 23 (Itar-Tass) -- The Russian government is going to increase minimal wages by 20 per cent, to reach 720 roubles, starting from 2005, and to increase old-age pensions by 250 roubles. Minister of Public Health and Social Development Mikhail Zurabov suggested this at a government meeting on Monday. According to his information, "the inflation rate, which is expected to stand at 7.5-8.5 per cent in 2005, gives us grounds for hope that by the results of 2005 average pensions will exceed the subsistence level by 5-6 per cent." 

Zurabov said that the reduction of the single social tax to 26 per cent brought about a 172-billion- rouble deficit in the Pension Fund. Under the 2005 draft budget, which was approved in general by the government on Monday, 74 billion roubles will be allocated from the Stabilisation Fund for covering the deficit. 

Finance Minister Alexei Kudrin said at the government meeting that "we can afford it, because the forecast financial reserves accumulated in the Stabilisation Fund with the oil price amounting to 28 dollars per barrel will perceptibly exceed the 500-billion-rouble level set by the legislation." 

Aside from it, the 2005 draft budget provides for the financing of the transfer of privileges to a monetary form, which is one of the key reforms. 73 billion roubles will be allocated for that purpose. Zurabov said their ministry was drafting a register of all the people, who are entitled to the privileges. According to preliminary estimates, there will be 12.3 million people on the list. So, 1,172 roubles a month will be allocated for each of them. 




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