State Funding Does Little to Support SMEs

UrBC, Moscow, August 8, 2018. The current system of subsidizing small and medium enterprises in non-central Russian constituencies with federal budget’s funds does little to ensure business development equality in these areas, Russia’s Accounts Chamber’s report states.

In 2014-2016, over 20% of federal funding allocated for SME support got directed to five out of eighty-five constituencies. In 2017, some 40% of subsidies got directed to eleven constituencies, each of which received RUR 200m or more; eight constituencies received only 0.7% of all the federal funding available. Remarkably, five out of eleven constituencies which got the largest transfers last year failed to meet their target figures for new jobs created in the area.

Additionally, Accounts Chamber points to lack of correlation between the target figures for the number of new jobs and the amount of funding provided. For one, Adygeya received RUR 200m in subsidies and was asked to create seventy-three new jobs, whereas Yamalo-Nenetsky Autonomous Region received under RUR 9m and was asked to create eighty-one new jobs.

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