The Russian Review/Volume 1/February 1916/The Russian Budget
The Russian Budget.
Following the established custom, the Russian Ministry of Finance had prepared an "Explanatory Note" which was attached to the Budget Bill, introduced in the Douma. This "Explanatory Note" comprises a review of the government finances during 1915 and a summary of the budget requirements for the current year.
Just as in the preceding Budget Bill, the Ministry of Finance is laboring under great difficulties, in order to provide a more or less accurate estimate of the probable revenues and disbursements. The impossibility of forecasting the future events of the War makes it even more difficult to perform this work satisfactorily. Moreover, the lack of knowledge concerning the effectiveness of new taxes and other sources of revenue, which have been introduced to take the place of the revenues yielded by the Spirits monopoly, renders hazardous a more or less close approximation of the possible returns.
The fiscal operations of 1915 show that the estimated budget-figure of government revenues exceeded the actual receipts by eleven per cent, or the sum of 350,000,000 roubles. A part of this deficit, about 150,000,000 roubles, is ascribable to decrease in alcohol revenues, due to the decision to discontinue entirely the operation of the Spirits monopoly, and to regulate severely the sale of all strong intoxicants. This determination was arrived at after the Budget Bill of 1915 was introduced in the Douma. The rest of the decrease, about 200,000,000 roubles, is due partly to errors in computation, and partly to the enemy's invasion of considerable territory, and its consequent evacuation.
The preliminary data concerning the fiscal operations during the first half of 1915 shows a decrease, as compared with the corresponding period of 1914, of 456,200,000 roubles. The revenues showing the greatest falling-off are those from the Spirits monopoly, customs duties, and railroad receipts. On the other hand, several items of revenue show an increase, as compared with the preceding year. Among these are certain classes of taxes as well as some newly introduced duties; also a tax of 15 per cent on all passenger and freight railroad receipts. The taxes on sugar, tobacco, matches, telephone, and telegraph also show an increase. The crops of the year were quite satisfactory.
All this made it possible for the total receipts for the year to reach the sum of 2,782,000,000 roubles, as compared with the budget estimate of 3,132,200,000 roubles.
The extraordinary receipts during the first three quarters of the year reached the sum of 5,632,400,000 roubles, of which 1,464,400,000 roubles were yielded by home loans.
The expenditures caused by the War amounted, during the first nine months of 1915, to 6,064,000,000 rubles. The total war expenditures during the year reached the sum of 8,000,000,000 roubles.
The Budget for 1916 was prepared with the assumption that the War would last during the whole current year. While recognizing the necessity of a thorough revision of the existing system of taxation in order to provide the government with larger revenues, and, at the same time, to distribute more equitably the burden of taxation, the Ministry realizes that these changes cannot be effected immediately. It therefore asks to be permitted to extend until January 1, 1917, and January 1, 1918, those measures which will expire before these dates.
The revenues for the current year are estimated at 2,923,083,005 roubles, and the expenditures at 3,250,915,197 roubles. Thus the estimated revenues are reduced, in comparison with the estimate for 1915, by 218,091,309 roubles.
The Budget for the current year shows several peculiarities. The most remarkable of these is the effect of the complete liquidation of the government Spirits monopoly. This liquidation caused a decrease in the government revenues of 94,400,000, as compared with the total from this source in 1915. The complete revenues from the alcohol monopoly are estimated at 49,900,000 roubles, to be collected on alcohol used for technical, industrial and medicinal purposes. It should be noted that, despite the extreme difficulties caused by the War, it seems quite possible to cover the deficit produced by the withdrawal of alcohol revenues, by gradually increasing the other means of raising money. As for the beneficent results of temperance upon the country's population, they are evidenced by the increased productivity of labor, the rapid growth of savings, and the decrease of crime. All this justifies the hope that the loss of alcohol revenues, which is quite a heavy one for the Ministry of Finance, will bring ample recompense in increasing the general prosperity, and hence improving the other sources of revenue.
Another peculiar feature in the Budget is the increase of the interest that must be paid on government loans. The amount paid out in 1915 was 404,300,000 roubles; the estimate for 1916 is 542,800,000 roubles, i. e., an increase of 34 per cent. The government debt is growing constantly on account of new loans, and, consequently, the amount of interest paid out is also bound to grow, mounting, perhaps, above the estimated figure.
The Budget must also take into account the very important circumstances that the territory invaded by the enemy is no longer a factor in the country's finances. The influence of this elimination is more noticeable in the case of receipts, than of disbursements. The decrease of revenues, due to the loss of the Vistula governments, and also the governments of Cholm, Vilna Grodno and Courland, is 141,200,000 roubles in comparison with the returns in times of peace, and 69,000,000 roubles in comparison with 1915. Due to the same cause, the receipts of the railroads, operated in this territory, decreased by 144,800,000 roubles. At the same time, the saving of expenditure on account of the evacuation of this territory was only 59,800,000 roubles.
The total Budget deficit for the current year is estimated at 327,800,000 roubles. It is hoped that this deficit will be wiped out by credit operations, which are also expected to cover the expenditures caused by the War, the amount of which is estimated for the current year at over 8,000,000,000 roubles.