Friday, Aug 06, 2004
Russia scraps soviet era benefits
By Vladimir Radyuhin
MOSCOW: The Russian Parliament has approved a sweeping reform of social benefits that dismantles the last remnants of the Soviet-era socialist welfare system.
The lower House, the State Duma, dominated by Kremlin loyalists, voted 309-118, with no abstentions, on Thursday to pass a raft of bills replacing free and subsidised services with cash payments. The benefits covered by the new law range from free transport for retirees, military servicemen and many public sector workers to free medication and vacations for war veterans and invalids. Under the law, the Federal Government will pay cash compensations equivalent from $25 to $120 to 13.6 million war veterans and invalids, and will shift responsibility for another 29 million of the most socially vulnerable to regional Governments.
Russia's overblown safety net cost 6.5 trillion roubles ($220 billions) or nearly 40 per cent of the country's annual budget, and catered in varying degrees for a total of 103 million people of Russia's population of 145 million. Critics accused the Government of dumping responsibility for the wellfare of the most needy sections of the population. A majority of Russian regions - 71 out of 89 - spend more than they earn and will just be unable to bear additional expenses, all the more so since the new law leaves it to the regions to decide what compensation payments to make, if any at all.
Opponents of the reform denounced it as `genocide' in a country where 30 million live below the subsistence level, and accused the Government of violating the Russian Constitution, which proclaims Russia a "social welfare state."
Copyright © 2004, The Hindu.