The government is discussing expanding revenues from the sale and management of state property
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The White House is looking for reserves to replenish the budget in the face of rising costs – one source could be increased revenue from privatization. On Wednesday, March 13, at the expanded board of the Federal Property Management Agency, the head of the Ministry of Finance, Anton Siluanov, announced plans to increase the plan for revenues from the sale of state property this year by almost a hundred times – from 1.2 billion to 100 billion rubles. In recent years, the efforts of the Federal Property Management Agency have been focused on small-scale privatization, but now, as the Ministry of Finance explained to Kommersant, income growth will be ensured by nationalized assets seized by the state through court decisions. The sale of all inefficiently managed state property is also being discussed – the government is considering a list of 30 state-owned companies whose shares can be sold without losing a controlling stake in them. The Federal Property Management Agency will also be able to make money on foreign assets transferred to the management of the state – they are not nationalized and cannot be sold, but can generate income.
The prospects for replenishing the budget through the privatization of state property were assessed at an expanded board of the Federal Property Management Agency on Wednesday. Deputy Prime Minister Marat Khusnullin and the head of the Ministry of Finance Anton Siluanov were satisfied with the department’s work for 2023, but demanded to increase the efficiency of managing state assets and increase sales of inefficiently managed property. First of all, according to Anton Siluanov, in 2024 it is necessary to increase the planned volume of budget revenues from privatization transactions from the current 1.2 billion to 100 billion rubles.
It is obvious that the state needs additional funds due to growing budget expenditures. Relative to the already strong increase in spending in 2023, in 2024 they should grow by another 13% (to 36.7 trillion rubles). So far, the budget situation does not look particularly strong: the deficit target planned for the whole year has already been almost fulfilled; based on the results of the first two months, it amounted to 1.474 trillion rubles. with a plan of 1.595 trillion rubles. However, the situation was approximately the same after the first two months in 2023, but then it normalized, and at the end of the year the deficit fell within the planned 2%. So far, noticeably increased expenses support high incomes: in January-February, compared to the low base of the beginning of last year, income immediately increased by 59%, and expenses by 17% (see “Kommersant” dated March 11). However, in any case, the authorities can hardly count on closing the deficit through privatization – as in previous years, it will be financed primarily from the National Welfare Fund and internal borrowings.
Nevertheless, the amount of 100 billion rubles declared by Anton Siluanov. significantly exceeds receipts from the sale of state property in previous years.
From the materials of the Ministry of Finance for the 2024 budget, it follows that privatization, which is one of the sources of financing the deficit, received 5.3 billion rubles in 2021, and 7.8 billion in 2022. For 2023, as reported on Wednesday Head of the Federal Property Management Agency Vadim Yakovenko, income from privatization amounted to 29 billion rubles. According to the Accounts Chamber, more than 50 billion rubles. Since 2013, the budget has actually received only once from privatization – 407 rubles. billion in 2016.
Let us explain that the official plan for 2024 in the budget law is traditionally underestimated (1.229 billion rubles), since the department does not undertake to give an accurate sales forecast in advance. In fact, this figure only reflects the forecast of revenues from the sale of shares of business companies within the framework of the so-called mass privatization. Proceeds from the sale of stakes in large companies have not yet been included in the 2024 budget.
However, after the adoption of the budget law, at the end of December 2023, the Ministry of Finance announced that it had sent the government a list of about 30 state-owned companies that could potentially be sold while maintaining a controlling stake. Let us recall that ideas for a new stage of privatization have been actively heard since the spring of 2023 (VTB head Andrei Kostin named Transneft, Russian Railways, Russian Post, Rostelecom, Rostec and Rosatom among potential assets for sale), but implementation large assets are complicated by the lack of buyers due to the departure of foreign investors from the Russian market, the Ministry of Finance said then.
The department explained to Kommersant that the plan will be achieved through “assets converted into state income by court decision.”
According to the Federal Property Management Agency, in 2023, seized property was sold for 20.4 billion rubles. Potentially, the list of privatized assets could also be supplemented by recently nationalized facilities of strategic importance, including the Murmansk Sea Fishing Port. Managing partner of the Altavista law firm, Vladimir Voronin, notes that the pace of nationalization has now increased significantly: “Over the past two years, the courts received 40 claims from the Prosecutor General’s Office of the Russian Federation, while in 2020 and 2021 the department filed only three claims per year, and in 2010- x – maximum one at a time.” Most often, according to his observations, the assets of the military-industrial complex and mechanical engineering were taken, and “the total value of the assets that the state has taken or tried to take since 2022, according to some estimates, is more than 1 trillion rubles.” The head of Sberbank, German Gref, at the EEF in September 2023, noted “a large number of claims from the prosecutor’s office regarding historical transactions, where, in fact, both the statute of limitations and the acquisition statute of limitations have long passed.”
Separately, the board discussed the approach to assets transferred to the management of the Federal Property Management Agency by presidential decrees (this is an alternative to nationalization) – as Russian assets of foreign companies (Rolf, Baltika, Carlsberg), which can then also be transferred to Russian owners by decrees. The head of the Ministry of Finance demanded to ensure “positive dynamics in the financial results of their activities in order to replenish the budget.”
Partner at the NSP law office, Ilya Rachkov, notes that in this case, we can talk about reducing costs and increasing taxable profit so that enterprises pay the maximum possible tax on it. “Receiving dividends (or increasing them) may also be a goal, although profits accumulated over previous years can be distributed in the form of dividends later, even years later,” says the lawyer. Maria Yakovleva, director of the Yakovlev and Partners legal group, notes that since foreign assets are under the temporary management of the Federal Property Management Agency, and not owned, the agency is limited in its actions and cannot make decisions on sales. “This key difference between management and ownership emphasizes that the rights and responsibilities of the Federal Property Management Agency are to manage assets for the purpose of preserving them and increasing their value in the interests of the state, and not to dispose of them through sale,” says the lawyer.
In general, the Ministry of Finance’s ideas to expand privatization and increase budget revenues by increasing the efficiency of property management fit into the broader framework discussed by the White House in recent months.
The expansion of national projects from 2025 will require about 2 trillion rubles from the budget. per year of new revenues expected to be received from tax reform (a more equitable distribution of the burden; on March 13, Vladimir Putin confirmed that we are talking, in particular, about a progressive personal income tax rate) and, as it now appears, from increased revenues from privatization.
According to Kommersant, in addition to those discussed at the board of the Federal Property Management Agency, we are also talking about the mechanism adopted by the government for “semi-automatic” decision-making on privatization transactions with investment conditions (see “Kommersant” dated February 27). Kommersant’s interlocutor, familiar with the discussion of the issue, confirmed that this issue is related to the White House’s consideration of the list of companies in which it is proposed to put on the market “excess” state blocks of shares to maintain control.
In addition, amendments to the bankruptcy law are being considered, which should allow the Federal Property Management Agency to fundamentally get rid of the need to maintain illiquid assets for which there are no buyers. In the same context, ideas are also being discussed for an additional analysis of the feasibility of maintaining the list of remaining federal state unitary enterprises (corporatization and clearing their list of ineffective ones is almost completed, Kommersant was told in the office of Deputy Prime Minister Dmitry Grigorenko, who is in charge of the issue) – and increasing income from property that remains in ownership states.
Officials from the White House economic bloc interviewed by Kommersant refused to comment on the initiatives of the Ministry of Finance, making it clear that no final decisions have been made yet. An indirect confirmation of this is the meeting between the president and the government scheduled for March 14 – in the “closed” part it is supposed to be a discussion of the main “forks” of economic policy raised in the address to the Federal Assembly.
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