“Does not fit into the budget”: Perm expert on new measures to support SMEs

Business Ombudsman Boris Titov proposed 8 urgent support measures for small and medium-sized businesses in the face of new CORONAVIRUS restrictions. In his annual report, he noted that the share of small and medium-sized enterprises (SMEs) in Russia's GDP in the pandemic 2020 is estimated at 19.8% against 20.8% in 2019. Such data are provided in the materials for the annual report of the business ombudsman Boris Titov to President Vladimir Putin, which was published by RBC. This share corresponds to the level of 2015, when SMEs accounted for 19.9% ​​in the country's economy. This is 2.5 times less than the average estimate of the share of the public sector in the Russian economy (50%), indicates the Commissioner for the Protection of the Rights of Entrepreneurs.

According to Yulia Starodumova, Senior Lecturer at the Department of Economics and Finance at the Perm Polytechnic University, most of the measures presented are quite logical, but still do not capture some of the latest measures.

“Unfortunately, these support measures do not mention in any way what is currently scaring the capital's restaurateurs, and may subsequently spread to the whole of RUSSIA - these are Covid-free zones, where only vaccinated visitors with QR codes will be allowed. According to entrepreneurs' forecasts, this measure could deprive shopping centers of about 80% of visitors and lead to the closure of most fitness clubs,” the expert explained.

The most significant proposal from the business ombudsman Titov was made regarding the downtime of employees during the lockdown period, he proposed to pay the wages of employees at the expense of the Russian budget. According to the Perm expert, such measures do not fit into the budget.

“The measures also include payment for employee downtime in the event of lockdowns at the expense of the Russian budget. But let's calculate: if about 4.5 trillion rubles were allocated to combat the consequences of the coronavirus in 2020, then in 2021 about 400 billion rubles were allocated in the budget for expanded social support measures. Whatever one may say, but paying for downtime at the expense of the state does not fit into the budget, ”said Yulia Starodumova, senior lecturer at the Department of Economics and Finance.

Earlier, RBC reported on eight urgent support measures from the report of Boris Titov.

To support small and medium-sized businesses, Titov suggests the following as urgent measures:

Preferential refinancing and restructuring of loans, leasing for affected SMEs (which lost more than 30% of revenue in 2020). Introduce a moratorium on the increase in the cadastral value for 2020-2022 in all regions. Extend the moratorium on inspections until 2022 inclusive. Easing restrictions on recruiting employees from neighboring countries. Compensate SMEs for the cost of antibody tests and PCR tests, expand the operation of mobile vaccination stations at enterprises. Extend compensatory measures for the purchase of personal protective equipment (PPE). In the event of a lockdown, vacation or long weekend, pay for downtime for employees at the expense of the state - directly, bypassing the employer. Freeze utility tariff increases for SMEs until 2023.