Economist Zubets called the indexation of social benefits from February 1 “ugly”

From February 1, over 40 various payments, benefits and compensations paid in the Russian Federation will be indexed by 11.9%, the Ministry of Labor reports. According to the head of the department Anton Kotyakov, in particular, we are talking about such social support measures as a one-time allowance for the birth of a child, a monthly allowance for child care, maternity capital, a monthly cash payment to veterans, a monthly insurance payment.

The size of the mother’s capital for the first child will increase to 587 thousand rubles, for the second – up to 775.6 thousand. The difference with 2022 will be 62.5 thousand and 82.5 thousand rubles, respectively. Indexation is held annually on February 1, its coefficient (now it is 1.119) is set on the basis of the actual consumer price index for the previous year. As Maxim Reshetnikov, the head of the Ministry of Economic Development, recently stated, according to operational data, “by the end of the year, our inflation is below 12%, to be more precise with rounding – 11.9%. “And this is despite the fact that we have postponed the indexation of housing and communal services tariffs from July 1, 2023 to December 1, 2022,” the minister added. It is in order for Rosstat to accurately calculate annual inflation (usually it publishes figures in mid-January), indexation of all benefits is carried out from February 1.

In addition, since the beginning of this year, the system of children’s payments has radically changed in Russia: a single allowance for children has been introduced. Citizens can apply for the appointment of benefits through the portal of public services. Also, from January 1, a decree of the Ministry of Labor introduced a procedure for registering persons who need social support measures. Within its framework, the relevant departments will collect data on Russians with low incomes and assign them the necessary assistance. As for indexation by 11.9%, experts interviewed by MK considered it inflexible and ineffective and listed the main disadvantages.

Alexey Zubets, Professor of the Financial University under the Government of the Russian Federation:

“Indexation was made in the amount of general inflation for 2022. At the same time, one must understand that the food price index in Russia, as a rule, is higher.

However, various kinds of consumer goods rose in price last spring even more than food, as the dollar strengthened sharply. But the main problem is that indexation was almost a year late: prices rose in March-April 2022, and far from 11.9%, and people will receive compensation only now. This means that they experienced a lack of income all last year.

In a good way, indexation should be carried out promptly: if, conditionally, inflation grew by 5% in a month, then social payments should be increased immediately by the same amount. A year’s delay is very ugly, in fact, we are talking about the quiet withdrawal of money by the state from a significant part of the population. And it’s best to introduce advanced indexation (based on the official forecast) and carry it out at least in two steps – at the beginning and middle of the year.”

Pavel Kudyukin, member of the Council of the Russian Labor Confederation:

“How correct it is to increase payments to all social categories by the same percentage – this needs to be sorted out. Looks like someone might be offended. It is also obvious that for many groups of the population, indexation will not cover real (not statistical) inflation for 2022, since it is less than it. Another perennial problem is that the state raises benefits retroactively, which means that people will not receive adequate compensation for their lost income. In general, the question is of global relevance: is it permissible to carry out indexation, as they say, in advance, does this accelerate inflation?

Sergey Smirnov, Leading Researcher, INION RAS:

“In itself, the current indexation is an absolutely correct measure. But insufficient. The fact is that each of the more than 40 benefits must have its own individual level of indexation. This is a substantive, not an arithmetical question.

The composition and price of the consumer basket for different social categories and different purposes, to put it mildly, do not match. Take at least the same maternity capital, which has several areas of use. The cost of medical services, medicines is one level of inflation, baby food is another, and so on. Someone invested in investment programs, in housing, in mortgages. Housing has fallen in price, and it is not clear to me why then index the targeted use of mother capital at all.

It may sound seditious, but such are the objective economic realities. Indexation should be tied to different baskets (for example, they are radically different for children of three and seven years old), and inflation should be calculated not in general, but for a specific group of consumers.

Indexing should not be averaged – it needs finer (pointed) tuning of its mechanisms and algorithms. Then it will really help those categories of citizens who are intended for indexed payments.”