SOVIET NATIONAL ACCOUNTS IN CURRENT RUBLES FOR 1953

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• Collection: General CIA Records
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• Document Creation Date: December 23, 2016
• Document Release Date: July 26, 2013
• Sequence Number: 2
• Publication Date: February 28, 1957
• Content Type: REPORT

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ECONOMIC INTELLIGENCE REPORT
SOVIET NATIONAL ACCOUNTS
IN CURRENT RUBLES
FOR 1953
CIA/RR 90
28 February 1957
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of whiCh in any manner
to an unauthorized person is prohibited by law.
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ECONOMIC INTELLIGENCE REPORT
SOVIET NATIONAL ACCOUNTS IN CURRENT RUBLES
FOR 1953
CIA/RR 90
(ORB Project 14.441)
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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FOREWORD
The national accounts in this report represent an attempt to
present the gross national product (GNP) of the USSR in current
rubles for 1953 in terms of the scheme recommended by the Organi-
zation for European Economic Cooperation (OEEC).
the
accouhts are useful because (1) the accounts provide the basis for
making the intercountry comparisons of national product
(2) the accounts furnish a
framework into which aggregative analyses of major sectors of the
economy, such as defense and consumption, can be fitted; (3) the
end-use and sector-of-origin breakdowns of GNP reveal useful infor-
mation on economic policy intentions and changes; and (4) many of
the components included in the process of constructing GNP accounts
have intelligence application within themselves. Among such magni-
tudes are the wage bill, agricultural incomes, retail trade expendi-
tures, and Investment outlays.
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CONTENTS
Summary
I. Introduction
II. Basic National Accounts
Page
1
1
3
A.
Household Sector
3
1. Production Account
3
2. Appropriation Account
3
a.
Income from Other Sectors
3
(1) Urban Wages and Salaries
3
(a) State Enterprises and Organizations
3
(b) Cooperative Artisans
4
(c) Military Pay
4
(d) Trade Union Salaries
4
(2) Noncooperative Artisans, Private
Professionals, and Others
4
(3) Agricultural Cash Incomes
6
(a) State Farm (Sovkhoz) and Machine
Tractor Station (MTS) Wages . .
6
(b) Money Payments to Collective
Farmers
6
(c) In-Kind Income Discounts to Collective
Farmers
6
(d) Net Income from Sale of Farm
Products
7
(4) Incomes in Kind
8
(5) Distributed Profits
8
(6) Imputed Rental Incomes
8
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Page
b. Transfer Receipts from Other Sectors ? ?
(1) Pensions and Allowances
(2) Student Stipends
(3) Interest Receipts
?
9
9
9
9
c. Consumption and Service Expenditures ? ?
4
10
(1) State and Cooperative Purchases.
?
(2) Collective Farm Market Purchases. ?
.
(3) Purchased Services
10
(4) Income in Kind
11
(5) Trade Union Dues
11
(6) Military Subsistence
11
(7) Forced Labor Subsistence
11
d. Rental Payments
12
(1) Housing
12
(2) Imputed Rent
12
e. Direct Taxes
12
f. Savings
13
(1) Net Bond Purchases
13
(2) Increment in Savings Deposits
14
(3) Private Housing Investment
14
3.
Capital Account
14
a. Savings
14
b. Borrowing from Government
15
c. Additions to Fixed Capital
15
d. Capital Transfers to Government
15
(1) Net Purchase of Government Securities
15
(2) Increment in Savings Deposits
15
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B. Economic Enterprise Sector
1. Production Account
Page
15
15
a.
Sales to Other Accounts
16
3.) Households
16
2) Government on Current Account
16
El.) Military Subsistence
b) Military Procurement
16
and Operations
16
(c) Health and Education
16
(d) Internal Security
18
(e) Administration
18
(f) Other Activities
18
(g) Trade Unions
19
(3) Household Capital Account
19
(4) Economic Enterprise Capital Account
19
(5) Government Capital Account
20
(a) Fixed Investment
20
(b) State Reserve Accretions
21
(c) Gold Purchases
21
(6) Collective Farm Investment in Kind
?
?
21
b.
Inventory Changes
21
c.
Subsidy Receipts
22
(1) Machine Tractor Stations
22
(2) State Farms
22
d.
Purchases from Other Sectors
22
State Reserves
22
2) Foreign Account
22
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Page
e.
Indirect Taxes
22
(1) Turnover Taxes
22
(2) Miscellaneous Taxes
22
f.
Capital Consumption Allowances
23
g.
National Income
24
(1) Compensation of Employees and Members .
24
E3,) Direct Incomes
24
b) Social Insurance
24
(2) Profits
24
(a) State Enterprises
24
(b) Enterprises and Economic
Organizations
25
(3) Collective Farm Investment in Kind
25
2.
Appropriation Account
25
a.
National Income by Sector
25
Compensation of Employees
25
2) Collective Farm Surplus
25
(3) Profits
25
b.
Income from Other Sectors
26
c.
Wage and Salary Payments
26
(1) Direct Incomes
26
(2) Social Insurance
26
d.
Direct Taxes
26
State Enterprises
26
2) Cooperatives and Collective Farms .
26
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e.
f.
Profit Distributions to Owners
Retained Earnings
(1) State Enterprises
(2) Collective Earns and Cooperatives . ? ?
(3) Collective Farm Investment in Kind ? ?
Page
26
28
28
28
28
3. Capital Account
28
a.
Retained Earnings
28
b.
Capital Consumption Allowances
28
c.
Capital Transfers from Government
28
1) Fixed Capital
28
2) Working Capital
30
d.
Borrowing from Government
30
(1) Short-Term Credit
30
(2) Long-Term Credit
30
e.
Gross Enterprise Investment
30
(1) Capital Repairs
30
(2) New Capital Investment
30
(3) Additions to Inventories
30
C.
Government Sector
31
1. Production Account
31
a.
Value of Government Services
31
b.
Compensation of Employees
31
c.
Purchases from Enterprises
32
2. Appropriation Account
32
a.
Income from Other Sectors
32
(1) Indirect Taxes
32
(2) Direct Taxes
32
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(3) Profits Taxes
(4) Social Insurance
(5) Trade Union Receipts
Page
32
32
32
b. Purchase of Government Services 32
c. Transfers to Households 34
d. Subsidy Payments 34
e. Savings 34
3. Capital Account 34
a. Savings 34
b. Capital Transfers 34
(1) Bond Sales to Households 34
(2) Increment in Savings Deposits 34
(3) Gold Sales on Foreign Account 34
(4) State Reserve Sales 34
C. Transfers to Other Sectors 36
r) Fixed Investment 36
2 Working Capital 36
(3) Gold Purchases 36
(4) State Reserve Accretions 36
d. Lending 36
Enterprises
2) Households
36
36
e. Government Investment 36
f. Additions to Cash Balance 36
D. Foreign Sector 37
1. Production Account 37
a. Import of Goods. and Services 37
b. Balance on Production Account 37
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Page
2. ' Appropriation Account 37
a. Surplus on Current Account 37
b. Balance on Production Account 37
3. Capital Account 37
a. Transfers from Rest of World to Government
Sector 37
b. Surplus on Current Account 39
E. Consolidated Sectors 39
1. Production Account 39
a. Depreciation 39
b. Indirect Taxes -- Subsidies 39
(1) Indirect Taxes 39
r3) Miscellaneous Taxes 39
) Subsidies 39
c. Value Added 39
(1) Households 39
(2) Social Insurance 39
(3) Enterprises 4o
d. Sales to Household Consumption 4o
e. General Government Purchases of Goods
and Services 4o
f. Gross Domestic Investment 4o
2NHouseholds 40
Enterprises 4o
(3) Government 4o
g. Foreign Balance on Production Account ? 4o
2. Appropriation Account 40
3. Capital Account 41
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Gross National Product by End Use and Sector
of Origin
Page
143
A. Gross National Product by End Use 43
1. Derivation in Established Prices 43
2. Derivation in Adjusted Rubles 43
B. Gross National Product by Sector of Origin, 1953 48
1. Agriculture 48
2. Construction 49
3. Transportation 49
4. Communications 50
5. Trade 51
6. Services 51
7. Industry 52
Appendix A.
Appendix B.
Appendix C.
Appendixes
Soviet National Accounts, 1953: Government
Expenditures
Soviet National Accounts, 1953: Derivation
of Portion of Income in Kind Comprised in
Industrial Activity
Soviet National Accounts 1953: Agricultural
Income
Appendix D. Conceptual Framework of the Soviet National
Accounts
53
57
59
67
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Accounts
Account
Account
1.
2.
Appropriation Account in the Household
Sector of the Basic National Accounts
of the USSR, 1953
Capital Account in the Household. Sector of the
Eat
5
Basic National Accounts of the USSR, 1953 . .
15
Account
3.
Production Account in the Economic Enterprise
Sector of the Basic National Accounts of the
USSR, 1953
17
Account
4.
Appropriation Account in the Economic Enter-
prise Sector of the Basic National Accounts
of the USSR, 1953
27
Account
5.
Capital Account in the Economic Enterprise
Sector of the Basic National Accounts of the
USSR, 1953
29
Account
6.
Production Account in the Government Sector of
the Basic National Accounts of the USSR,
1953
33
Account
7.
Appropriation Account in the Government Sector
of the Basic National Accounts of the USSR,
1953
33
Account
8.
Capital Account in the Government Sector of the
Basic National Accounts of the USSR, 1953 . .
35
Account
9.
Production Account, Appropriation Account, and
Capital Account in the Foreign Sector of the
Basic National Accounts of the USSR, 1953 . .
38
Account 10.
Production Account in the Consolidated Sector
Accounts of the Basic National Accounts of
the USSR, 1953
Account U.
Appropriation Account in the Consolidated
Sector Accounts of the Basic National Accounts
of the USSR, 1953
42
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Account 12. Capital Account in the Consolidated Sector
Accounts of the Basic National Accounts of
the USSR, 1953
Tables
1. Classification of' Soviet Gross National Product by
End Use, 1953
2. Soviet Gross National Product, by End Use, in Current
Prices, 1953
3. Adjustment of End Use Magnitudes for Soviet Turnover
Tax, 1953
4. Soviet Gross National Product, by End Use, Adjusted
for Turnover Tax, 1953
Page
42
44
46
47
50
5. Gross National Product of the USSR by Sector of
Origin, 1953 51
6. Distribution of Agricultural Crops in the USSR, by
Marketing Channel, 1953 6o
7. Agricultural Prices in the 1.15$2, 1953 61
8. Agricultural Incomes in the USSR, 1953 62
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CIA/RR 90 S-E-C-R-E-T
(ORB Project 14.441)
SOVIET NATIONAL ACCOUNTS IN CURRENT RUBLES
FOR 1953*
The gross national product (GNP) of the USSR in established prices
in 1953 amounted to 1,089 billion rubles. Of this total, about 33
percent originated in agriculture, about 30 percent in industry, about
17 percent in service activities, and the remaining 20 percent in
transport, communications, trade, and construction. The total thus
generated was spent so as to devote over 63 percent to consumption
and more than 20 percent to investment. Of the remaining 15 percent,
all but a small fraction was used for defense purposes, the rest
going to support other governmental activities.
By removing from the above magnitude that portion of the turnover
tax which does not appear to be an implicit factor payment, a factor-
cost GNP of 1;004 billion rubles for 1953 is obtained. Because of
the incidence of the turnover tax, the percentage of GNP allocated to
consumption is smaller in factor cost than in established prices.
I. Introduction.
There exists no single measure capable of defining the economic
potential of a nation, because the magnitude desired is dependent upon
the purpose for which the measure is intended -- for example, esti-
mates of military potential, of consumer welfare, or of growth possi-
bilities. The nearest approach to a general appraisal of the over-all
productive ability of an economy is an estimate of the net value of
total goods and services produced in a particular time period -- the
gross national product (GNP). ?
* The estimates and conclusions contained in this report represent
the best judgment of ORB as of 1 September 1956.
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The first, basic section of this report consists of the detailed
GNP accounts themselves, constructed to include all net income and
outlays generated in the Soviet economy in 1953. The procedure used
to construct the accounts represents a modification of that employed
by the Organization for European Economic Cooperation (OEEC) for
constructing the accounts of its member states. It has the virtue of
a double-entry accounting system and in addition offers the opportun-
ity to check the validity of estimates at several points. With the
major exception of wage incomes, data for the important components
are available from official sources, so that the over-all margin of
error can be considered to be small. The estimate of the margin of
error is confirmed by the relatively slight statistical discrepancies
appearing in the accounts.
In the second section of this report the GNP accounts have been
reclassified into significant sector-of-origin and end-use categories.
In this calculation, adjustments have been introduced to account for
the effect of the turnover tax.
Appendixes A, B, and C in this report are intended to elucidate
the methodology used to obtain specific estimates. Ap- 50X1
pendix A details the procedure for calculating governmental expendi-
tures from residuals in the State Budget. Appendix B indicates the
method used to isolate the industrial processing element from strictly
agricultural activities in the determination of income in kind. Ap-
pendix C describes the method employed to cal- 50X1
culate agricultural incomes by direct valuation of total output valued
by prices received in the several distributive channels.
Appendix D presents the conceptual framework within which the
basic accounts are cast. It discusses at length the reasons for the
adoption of the system of accounts first developed by the OEEC and
compares the utility of this method with that of the method developed
by the US Department of Commerce. The latter method was previously
employed in CIA calculations in modified form. Appendix D also indi-
cates how the OEEC system of accounts can be used as a bridge to
accounts of a more disaggregated nature.
?
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II. Basic National Accounts.
A. Household Sector.
1. Production Account.
Under the system of accounts used by the Organization
for European Economic Cooperation (OEEC), the production account in
the household sector is designed to measure the income of domestics.
These data are not available for the USSR.
2. Appropriation Account.
The appropriation account in the household sector of the
basic national accounts of the USSR is shown in Account 1.*
a. Income from Other Sectors.
(1) Urban Wages and Salaries.
(a) State Enterprises and Organizations.
The general wage bill is composed of wages
and salaries for the worker and employee labor force, income of
cooperative artisans, military pay, military subsistence payments,
and forced labor subsistence costs. II** The income of noncoopera-
tive artisans and private professionals and the income of collective
farms from both the collectives and their own private plots are not
Included.
A close historical proportionality exists
between the general wage bill (less military pay and subsistence and
earnings of cooperative artisans) and social insurance contributions.
In 1940, 1944, and 1948, social insurance payments amounted to about
6 percent of the general wage bill less the aforementioned components. 2/
* Account 1 follows on p. 5. The general form of sector accounts
used in the report is shown in Appendix D.
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If this 6-percent proportionality is still
assumed to exist in 1953,* the general wage bill less the indicated
exceptions becomes 386.7 billion rubles, given the social insurance
payments of 23.2 billion rubles (see B, 1, g, (1), (b), below). From
this total is subtracted the 16.6-billion-ruble state farm and machine
tractor station (MTs) wage bill (see (3), (a), below).
(b) Cooperative Artisans.
According to a statement by Mikoyan, there
were 1,865,000 cooperative artisans in 1953. V If the increase in
the annual earnings of this group between 1940 and 1953 was the same
as that for the worker and employee group -- 201 percent -- coopera-
tive artisan earnings were 11.2 billion rubles.
(c) Military Pay.
In 1953, on the basis of known position pay
scales applied to the estimated strength and composition of the armed
forces, military pay is estimated to have amounted to 21.6 billion
rubles.
(d) Trade Union Salaries.
Total expenditures of trade unions in 1953
were 240.1 percent g of the 1946 level of 1.874 billion rubles. I/
Of this total, 17.3 percent, or 0.8 billion rubles, was expended for
administrative and organizational purposes. Li./ This portion of the
trade union budget will be assumed to be equivalent to total wage
payments.
(2) Noncooperative Artisans, Private Professionals,
and Others.
estimated that the 50X1
incomes of noncooperative artisans and private professionals, coopera-
tive profit shares, travel allowances, and bonus distributions from
director's funds amounted to 18 billion rubles in 1953. 2/
* Postwar references indicate little change in the range of rates
of social insurance deductions paid by state enterprises. _3/
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Account 1
Appropriation Account in the Household Sector
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay
Consumption and service
expenditures
State end cooperative
purchases
Collective farm market
purchases
Purchased services
Income in kind
Trade union dues
Military subsistence
Forced labor subsistence
Subtotal
Rental payments
Rousing
Imputed rent
Subtotal
Income
Income from other sectors
Urban wages and salaries
396.5 State enperprises and
organizations
45.0 Cooperative artisans
31.7 Military pay
104.2 Trade union salaries
3.8
10.5
8.9
609.2
3.8.o
8.3
Total outlay for
goods and services 635.5
Direct taxes
Savings
Net bond purchases
Increment in savings
deposits
Private housing
investment
Subtotal
Transfer items
Total outlays
46.1
11.8
12.3
0.6
24.7
7o.8
LL30
Subtotal
Noncooperative artisans,
private professionals,
and others
Agricultural cash incomes
Sovkhoz and ICS wages
Money payments to
collective farmers
In-kind income discounts
to collective farmers
Net income from sale of
farm products
Subtotal
Incomes in kind
Farm incomes in kind
Military subsistence
Forced labor 'subsistence
Subtotal
Distributed profits
Imputed rental incomes
Total income currently
earned
Transfer receipts from other
sectors
370.1
11.2
21.8
0.8
4034
18.0
16.6
18.6
2.5
83.1
70.8
104.2
19.5
8.5
132.2
635.3
Pensions and allowances 41.0
Student stipends 5.8
Interest receipts 7.2
Subtotal 94.0
Statistical discrepancy 17.0
Total. incomes 708?1
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(3) Agricultural Cash Incomes.
(a) State Farm (Sovkhoz) and Machine Tractor
Station (MTS) Wages.
In 1953 there were about 1,844,000 employees
of state farms. 12/ The average annual wage paid by state farms in
1941 was 2,795 rubles. 11/ Assuming that the annual wage in 1953 was
201 percent of the prewar level as in the case of workers and employees
as a whole, the state farm wage bill was 10.3 billion rubles.
In 1953 the outlays per hectare of standard
plowing for wages and administrative expenses amounted to 12.87
rubles. 12/ Multiplying this average by 486 million, the number of
hectares of standard plowing accomplished in 1953 1,31, gives a wage
bill of 6.3 billion rubles. The combined state agricultural wage
bill was thus 16.6 billion rubles in 1953.
(b) Money Payments to Collective Farmers.
Total money incomes of collective farms were
49.6 billion rubles in 1953. LE/ In the more efficient kolkhozes,
up to 4o percent of incomes was paid out in the form of labor day
payments, and in certain outstanding ones in favored regions 45-55
percent. 12/ A national average of 37.5 percent is assumed to have
existed in 1953. Under this assumption, money incomes of collective
farmers from labor days worked in collective tasks amounted to 18.6
billion rubles in 1953.
(c) In-Kind Income Discounts to Collective
Farmers.
As part of its incentive policy in the contrac?
tual procurement of cotton, sugar beets, and flax and in the obliga-
tory procurement of milk and sunflowers, the state provides in-kind
payments of food products at lower than market prices. The total value
of these discounts is estimated officially to amount to 10 to 12 percent
of total procurement and contractual payments by the state. 2...y In
1953 the value of these food product discounts amounted to about 2.5
billion rubles (11 percent of total state procurements plus purchases
of cotton, sugar beets, flax, and sunflowers, as calculated in Appendix
C).
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(d) Net Income from Sale of Farm Products.
The 33.1-billion-ruble total of net income
from the sale of farm products includes both money income of farm
households realized from sales on the collective farm market, amount-
ing to 30.5 billion rubles, and sales to government procurement agen-
cies of 6.3 billion rubles less an allowance for money costs of
production, or 3.7 billion rubles. The calculation is summarized as
follows:
Billion Rubles
Money incomes of collective farms from all sources
Portion realized from sale of farm products
State procurement
49.6
4-5.2
Procurement from collective farms 25.7
Procurement from private household plots (the balance) 6.3
Total 32.0
Sales on the collective farm market
Portion sold by collective farms 19.5
Sales by farm households (the balance) 30.5
Total 50.0
i. Money income of collective farms has al-
ready been discussed (see (b), above).
11 from
7.2 to 12.7 percent of total collective farm income in 1952 was de-
rived from sources other than crop sales. 17/ On the basis of this
range, an average proportion of 10 percent is assumed to have pre-
vailed in 1952. The large increase in procurement prices in 1953 had
the effect of reducing the noncrop portion of total income to 9
percent, or 4.4 billion rubles.
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iii. The income of collective farms and private
households from state procurement was planned to be 9 billion rubles,
or 45 percent over the 1952 level. 1?/ This statement would imply
total state procurement amounting to 29 billion rubles. Actual pro-
curement in 1953 was 3 billion rubles above plan 12/ for a total pro-
curement bill of 32 billion rubles.
iv. The division of procurement sales between
collective farms and private households is based on the proportions,
though not the absolute estimates, developed in a RAND research
memorandum. 22/
v. The portion of collective farm sales made
by collective farms emerges as a residual when sales to state procure-
ment agencies are deducted from total noncrop incomes.
vi. Money costs of production of private house-
holds are estimated at 10 percent of total nonwage incomes, or 3.7 billion
rubles. This proportion is based on prewar experience. 21/
(4) Incomes in Kind.
(a) Farm incomes in kind (see c, (4), below).
(b) Military subsistence (see c? (6), below).
(c) Forced labor subsistence (see cl (7), below).
(5) Distributed Profits.
Profits of producer cooperatives were 3.9 billion
rubles in 1950 22/ and 5.9 billion rubles in 1954. 2.31 By interpolation,
profits for 1953 amounted to 5.4 billion rubles. The schedule of the
tax on cooperative profits ranges from 20 to 50 percent. gi/ Taking
the midpoint of 35 percent gives a tax of 1.7 billion rubles. Deducting
this amount and the 1.4 billion rubles of investment out of profits
leaves 2.3 billion rubles for distribution of profits to members of
cooperatives in 1953.
(6) Imputed Rental Incomes.
(See d, (2)y below.)
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b. Transfer Receipts from Other Sectors.
(1) Pensions and Allowances.
These include (a) social security, consisting of
pensions for disabled veterans and other invalids and some retirement
pensions; (b) aid to mothers of many children and unmarried mothers;
and (c) social insurance, which comprises pensions, sick benefits, and
outlays on convalescent and recreational facilities. Although all
expenditures of the first two types constitute direct payments to the
population, only the pension and sick benefit portion of social insur-
ance expenditures may be considered a transfer payment. The portion
devoted to outlays on convalescent and recreational facilities must be
deducted; it has been added to health outlays (see B, 1, a, (2)) (c),
below).
Pensions and allowances were estimated by deducting
from total social welfare expenditures of 43.4 billion rubles and 46.8
billion rubles Z5./ outlays on convalescent and recreational facilities,
which were planned at 2.4 billion rubles. RY
(2) Student Stipends.
Stipends were planned at 5.8 billion rubles in
1953. 3//
(3) Interest Receipts.
Interest payments to households have been previously
calculated at 5.2 billion rubles (see f, (1), below). In addition,
there were interest payments of 2 billion rubles to Organizations. This
item represents the difference between total loan service and loan ser-
vice payments to the population. It consists primarily of interest
payments on state debt held by the savings banks but also includes
expenditures on the administration of the state loan, which are handled
by the savings banks. No interest is paid on the state department held
by the state insurance system. Lig] Loan service in 1953 is estimated
at 2 billion rubles. It is assumed to be slightly larger than in the
last reported year, 1952. In 1952, total loan service was planned at
2
8.9 billion rubles 2 /, and payments to the population were planned at
L7
7 billion rubles 0 , with the difference for payments to organizations
equaling 1.9 billion rubles. Since earnings of the savings banks are
transferred to depositors in the form of interest payments, it will be
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assumed that the 2 billion rubles of interest receipts by organizations
eventually become interest income to the population. Therefore) house-
hold interest receipts totaled 7.2 billion rubles in 1953.
c. Consumption and Service Expenditures.
(1) State and Cooperative Purchases.
Retail trade, amounted
to 430.7 billion rubles in 1951. Li From 7 to 8 percent of total
retail trade turnover consisted of sales to institutional purchasers. 2/
On this basis, 92.5 percent of total retail trade -- 398.4 billion
rubles -- consists of sales to individuals. Sales to individuals of
1.9 billion rubles are assumed to represent purchases for production
expenditures on household plots. These outlays comprise 50 percent of
such expenditures (see a, (3), (d), (vi), above). Total retail
sales to individuals for personal consumption are thus 396.5 billion
rubles in 1953.
of total retail
(2) Collective Farm Market Purchases.
Collective farm market sales comprised 10.4 percent
turnover, including state and cooperative, in 1953. 3/
It amounted to 50 billion rubles ( 430.7
480.7 - 430.7 = 50.0)
(1.00 -0.104
It is assumed that the prewar proportion of collec-
tive farm market sales to institutional buyers -- 10 percent -- prevailed
in 1953. This proportion rose during the early postwar years, when
cooperatives were permitted to buy in the collective farm market. The
proportion must have fallen back after 1949, when the government rescinded
the conversions which permitted cooperative purchases. Collective farm
market sales to individuals in 1953 are therefore estiMated at 45 billion'
rubles.
(3) Purchased Services.
in 1954 less than
25 percent of the total money incomes of the population were spent for
"communal, transport, cultural, and other services, and also for taxes,
obligatory and voluntary savings." 1V
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The outlay for services is obtained by assuming
that noncommodity expenditures of households comprised 22.5 percent of
total outlays) or 128.2 billion rubles (396.6 + 45.0 c69?7
(1.00 -0.225 0.775 '
441.5 = 128.2). From this total the following expenditures are sub-
tracted: taxes, 46.1 billion rubles (see e) below); state bonds, 16.3
billion rubles (see f, (1)) below); increment to savings deposits, 12.3
billion rubles (see f, (2), below); trade union dues) 3.8 billion rubles
(see (5)) below); and housing outlays, 18 billion rubles (see d) (1),
below). The residual of 31.7 billion rubles represents the outlay for
services.
(4) Income in Kind.
The calculation of total income in kind is explained
in the appendix on agricultural income. The estimate for 1953 is 104.2
billion rubles.
(5) Trade Union Dues.
Various postwar travelers to the USSR have indicated
that trade union dues are set at approximately 1 percent of gross wages.
In 1953 this amount would be about 3.8 billion rubles.
(6) Military Subsistence.
A military subsistence estimate of 19.5 billion
rubles is calculated from
estimated military daily ration priced at 1953 retail prices
less a trading markup multiplied by the estimated strength of the
armed forces. .31/
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(7) Forced Labor Subsistence.
In 1948 the comprehensive wage bill, which included
worker and employee incomes, the incomes of members of cooperatives,
military pay subsistence) and forced labor pay and subsistence, amounted
to "almost double that of 1940." 326i The 1940 wage bill amounted to
161 billion rubles. On this basis the 1948 comprehensive wage bill is
estimated at 315 billion rubles. From this total are deducted the
worker and employee wage bill (see a, (1)) (a), above); the earnings of
cooperative artisans (see a, (1)) (b)) above); military pay (see a, (1),
(c), above); and military subsistence (see (6), above), to obtain a forced
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labor subsistence estimate of 16.3 billion rubles. The estimate for 1953
is derived from the 1948 estimate through the use of two assumptions.
The price index for forced labor subsistence changes according to the
state store price indexes for food and clothing with respective weights
of 4 and 1 -- that is, 1953 = 58 percent of 1948. 112/ This adjustment
would give an estimate of 9.5 billion rubles for forced labor subsis-
tence in 1953. If it is further assumed that the involuntary labor
force was reduced by 10 percent, the cost of forced labor subsistence
in 1953 becomes 8.5 billion rubles.
d. Rental Payments.
(1) Rousing.
4 percent
of the worker's budget was spent for rent and communal services, presum-
ably in 1953. 111/ Applying this proportion to total urban civilian
cash incomes of 451 billion rubles (state enterprithe and organization
wages, cooperative wages, noncooperative artisan and private profes-
sional incomes, and transfer receipts) yields a housing expenditure of
18 billion rubles in 1953.
(2) Imputed Rent.
In 1953, state-owned urban housing space was approx-
imately 211.2 million square meters.42/ Valuing total space at the
average annual rental outlay of 12 rubles per square meter)13./ yields
a rental outlay estimate of 2.5 billion rubles. In 1953, privately
owned urban dwelling space was estimated at 109.7 million square meters
and privately owned rural housing at 832.6 million square meters. 121/
In order to make rural housing comparable to urban housing, in which
rents are based on living space rather than total space, only 70 per-
cent of total rural housing space is valued. Applying the explicit
urban rental charge of 12 rubles per square meter yields an imputed
rent estimate of 8.3 billion rubles in 1953.
e. Direct Taxes.
The fulfillment figure of 46.1 billion rubles for direct
tax revenues was obtained from a budget speech by Finance Minister
Zverev. L52
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f. Savings.
(1) Net Bond Purchases.
Entries represent the difference between (a) gross
bond purchases and (b) bonds retired during the year.
(a) Gross bond purchases consist of subscriptions
to the annual spring mass loan drive and voluntary purchases at savings
banks of bonds of the 3-Percent Internal Lottery Loan. In 1953, bond
purchases during the mass loan drives amounted to 15.3 billion rubles. )2,/
Purchases of the 3-Percent Internal Lottery Loan are estimated at 1 billion
rubles on the basis of data published in the Soviet press. 111/ Total
purchases are therefore estimated at 16.3 billion rubles.
(b) Bonds retired during the year were found by
estimating the distribution of loan service payments to the public be-
tween interest and principal retirement. Principal was separated from
interest, in annual loan service, by examining the various bond issues
on which loan service was paid in 1953 and reconstructing the schedule
of loan service payments. Loan service is paid through two types of
lottery drawings -- prize drawings and nonprize drawings. One-third
(35 percent) in the case of some issues) of the value of each bond issue
is retired, over the 20-Year life of the issue, by prize drawings, in
which the lucky bondholders receive prizes larger than the face value
of their bonds, which are then surrendered. The remaining two-thirds
(in some cases, 65 percent) of each bond issue is retired, during the
sixth to the twentieth years of the life of the issue, by nonprize
drawings, in which bonds are purchased at face value; the chance ele-
ment of this lottery exists in determining how long the bondholder must
wait toget back his principal. The principal component of loan ser-
vice thus consists of (i) the face value of bonds retired in prize
drawings and (ii) the total value of nonprize drawings.
Interest payments are calculated by subtract-
ing the principal retirement component of prize drawings from the total
value of prize drawings. These payments appear as transfer payments
to households in b, (3), above.
The following results were obtained through
the reconstruction of loan service schedules:
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Loan service payments to population
Estimated retirement of principal
Estimated Interest
Billion Rubles
1211
9.7 11?./
-4.5
Principal retirement was then subtracted from
gross bond purchases to obtain net bond purchases:
Gross bond purchases
Retirement of principal
Net bond purchases
Billion Rubles
1953
16.3
- 4.5
11.8
(2) Increment in Savings Deposits.
Savings deposits of individuals rose by 12.3 billion
rubles in 1953. IS
(3) Private Housing Investment.
Private housing investment outlays in 1953 are
estimated at 1.2 billion rubles, of which 50 percent is assumed to be
financed by Communal Bank Loans and the remainder by private savings. 22/
3. Capital Account.
The capital account in the household sector of the basic
national accounts of the USSR is shown in Account 2.*
a. Savings.
This entry is the same as the savings component in the
household appropriation account (see 2, f, above).
* Account 2 follows on p. 15.
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Account 2
Capital Account in the Household Sector
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay Income
Additions to fixed capital
Capital transfers to government
1.2 Savings 24.7
Borrowing from
government 0.6
Net purchase of government
securities 11.8
Increment in savings deposits 12.3
Total
25.3 .12,1
b. Borrowing from Government.
Households borrowings from the Communal Bank for private
housing have been estimated at 0.6 billion rubles in 1953 (see 2, f, (3),
above).
c. Additions to Fixed Capital.
As indicated (see 2, f, (3), above), private housing out-
lays are estimated at 1.2 billion rubles in 1953.
d. Capital Transfers to Government.
(1) Net Purchase of Government Securities.
(See 2, f, WI above.)
(2) Increment in Savings Deposits.
Savings bank deposits increased by 12.3 billion
rubles in 1953. 51/
B. Economic Enterprise Sector.
1. Production Account.
The production account in the economic enterprise sector
of the basic national accounts of the USSR is shown in Account 3.*
* Account 3 follows on p. 17.
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a. Sales to Other Accounts.
(1) Households.
Sales to households amounted to 488.7 billion rubles
in 1953. They represent the sum of state and cooperative purchases,
collective farm market purchases, and purchased services (see A, 2, c,
(1), (2), and (3), above) and the nonrental portion of housing outlays,
15.5 billion rubles.
(2) Government on Current Account.
(a) Military Subsistence.
(See Al 2; c; (6), above.)
(b) Military Procurement and Operations.
From total realized defense expenditures of
105 billion rubles (20)4 percent 2/ of total expenditures of 514.8
billion rubles l) deduct 19.5 billion rubles of military subsistence
(see A; 2; c; (6), above); and 21.6 billion rubles of military pay (see
CI 1; b; below) to obtain 63.9 billion rubles for military procurement
and operations.
(c) Health and Education.
Sales to health and education activities on
current account are obtained by deducting the wage bill and inveatment
expenditures for these purposes from total outlays. Total education
outlays are equal to the budget appropriation of 61.1 billion rubles ill/
less 5.8 billion rubles for student stipends (see AI 21 b) (2); above
or 55.3 billion rubles.
Total health outlays of 26.6 billion rubles
consist of the budget appropriations for health of 24.2 billion ru-
bles 22/ and health expenditures carried as outlays on convalescent
and recreational facilities in the pensions and allowances appropria-
tion of the budget; or 2.4 billion rubles. 2?,,i
From total health and education expenditures
of 81.9 billion rubles are deducted 52 billion rubles for wages and
salaries (see CI 1; b; below) and 6 billion rubles for capital invest-
ment (see (5); (a); below); leaving 23.9 billion rubles for sales to
health and education activities on current account.
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Account 3
Production Account in the Economic Enterprise Sector
of the Basic National Accounts of the USSR
1953
Outlay
Purchases from other sectors
State reserves
Foreign account
Subtotal
Indirect taxes
8.8
3.6
12.4
Turnover taxes 243.6
Miscellaneous taxes 53.2
Subtotal 296.8
Capital consumption allowances
National income
Compensation of employees
and members
Direct incomes
Social insurance
Subtotal
Profits
405.4
23.2
426.6
State enterprises 89.8
Enterprises and economic
organizations 24.1
Subtotal 1111
Collective farm investment
in kind
Total
7.3
893.0
Income
Sales to other accounts
Households
Government on current
account
Military subsistence
Military procurement
and operations
Health and education
Internal security
Administration
Other activities
Trade unions
Subtotal
488.7
19.5
63.9
23.9
7.0
3.3
31.0
3.7
152.3
Household capital
account 1.2
Economic enterprise
capital account 179.6
Government capital account
Fixed investment
State reserve accretions
Gold purchases
Subtotal
Collective farm investment
in kind
Inventory changes
Subsidy receipts
Machine tractor stations
State farms
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Subtotal
7.4
9.2
3-7
LI
12.8
6.7
8.4
15.1
Statistical discrepancy 14.9
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(d) Internal Security.
The basic internal security estimate for 1953
is based on 1952, the last year for which information is available on
expenditures for "maintenance of the State apparatus" which includes
internal security and conventional administration. In 1952 these expen-
ditures of the union and republic budgets in 1952 were planned at 31.4
billion rubles 21/. Conventional administrative expenditures in 1952
were estimated at 60 percent 2.g/ of total conventional administrative
expenditures (plan) of 14.4 billion rubles, 22/ or 8.6 billion rubles,
leaving a difference of 22.8 billion rubles for internal security. A
decrease of 21 billion rubles for 1953 has been estimated to allow for
a probable reduction in administrative expenses in that year as a result
of the merger of MVD and MOB and the transfer to industrial ministries
of some economic activities of the MVD. One-third of the internal
security expenditure, 7 billion rubles, is assumed to represent pur-
chases on current account.
(e) Administration.
In 1955, wages comprised 66 percent of total
administrative outlays,n.2/ of 13.9 billion rubles (see C, 1, b, below).
If the same relationship is assumed to have prevailed in 1953; nonwage
outlays are estimated at 4.7 billion rubles. Capital investments
amounted to 1.4 billion rubles in 1953 (see (5)) (a), below). There-
fore, administrative purchases on current account were 3.3 billion
rubles in 1953.
(f) Other Activities.
This entry of 31 billion rubles represents sales
to government on current account to support such miscellaneous activi-
ties as subsidies, research and development, and the conduct of elec-
tions. Of this total) 23.9 billion rubles cover economic activities
not otherwise demarcated under the budgetary heading Financing the
National Economy. The remaining 7 billion rubles consist of budgetary
expenditures which emerge as a residual after all other outlays have
been explicitly classified. (For the derivation of both these categor-
ies) see Appendix A.)
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(g) Trade Unions.
Of total trade union expenditures of 4.5 billion
rubles in 1953 (see A, 2, a, (1), (d)0 above), all but 0.8 billion ru-
bles were used for purchases of materials and supplies.
(3) Household Capital Account.
(See A, 3, c, above.)
(4) Economic Enterprise Capital Account.
This entry represents the gross capital investment
of economic enterprises. It amounts to 179.6 billion rubles and is
composed of the following:
(a) Fixed investment in the national economy, 130
billion rubles. The planned volume of state investments in 1953 in
prices of 1 July 1950 was 156.1 billion rubles. L../ The construction-
assembly share was fulfilled by 85 percent ?2/ and comprised 63 percent
of total state investments in 1953. al/ Therefore, total outlays
amounted to 141.3 billion rubles. The machinery and equipment por-
tions of investment are assumed to have been fulfilled by 100 percent
on the basis of statements regarding fulfillment of production plans
by machine-producing ministries.
In terms of 1953 prices, total fixed invest-
ment amounts to 130 billion rubles. The goal for savings in the cost
of state capital investment from reductions in wholesale prices of
1 January 1952 and from reduced cost of construction assembly work
were set at 15.6 billion rubles, or 10 percent of total cost. 21/
The plan for construction cost reduction was not met, and costs remained
at the 1952 level. $.2/ Thus total investment cost reductions amounted
to 11.3 billion rubles.
(b) Extralimit and decentralized investment of 5.5
billion rubles. This category includes cooperative investment, above-
plan investments of state enterprises, and investments financed from
funds borrowed from the long-term banks with the exceptions of collec-
tive farm investments. During the Fifth Five Year Plan period (1951-55), .
such outlays amounted to 31.6 billion rubles in prices of 1 July 1955.
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If this sum is distributed among the 5 years according to the official
volume index of state investment, outlays for 1953 amount to 5 billion
rubles. In 1953 terms they would be 5.5 billion rubles.
billion rubles. Li
f, below).
(c) Collective farm monetary investments of 12.9
(d) Capital repairs of 33.6 billion rubles (see
(e) Expenditures for design research and geological
prospecting work of 5 billion rubles. Expenditures of investment plann-
ing organizations are not included in the fixed investment allocation.
In 1951, the last year for which such expenditures were reported,
planned outlays amounted to 3.7 billion rubles. g2 This figure has
been moved by an index of planned investment to obtain an estimate of
4.4 billion rubles for 1953. In addition, it is estimated that out-
lays of geological prospecting organizations amounted to 0.6 billion
rubles.
From this total economy-wide investment outlay
of 187 billion rubles are deducted 7.4 billion rubles of investment
expenditures on government capital account (see (5), (a), below).
(5) Government Capital Account.
Total sales were 20.5 billion rubles in 1953.
(a) Fixed Investment.
Total investments in housing and social-cul-
tural (health and education) activities amounted to 120 billion rubles
(1955 prices) for 1951-55. In terms of 1950 prices, they totaled
about 138 billion rubles. Housing investments were 105 billion
rubles. /2/ Thus social-cultural investments were 33 billion rubles
during the Plan period. Of this 5-year total, it is estimated that
6 billion rubles were spent during 1953.
Investment in government administrative struct-
ures and equipment was 1.4 billion rubles in 1953. /1/
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(b) State Reserve Accretions.
Budgetary outlays for accretions to state re-
serves are estimated at 9.2 billion rubles in 1953.
(c) Gold Purchases.
Purchases of gold for monetary use are estimated
at 3.7 billion rubles in 1953.
(6) Collective Farm Investment in Kind.
(See g, (3), below.)
b. Inventory Changes.
Inventory changes totaling 12.8 billion rubles are
financed from three sources) as follows:
(1) Planned budgetary allotments of 4.3 billion rubles
for expansion of working capital. 2/
(2) Accretions to working capital of 3.5 billion rubles
out of retained income. Planned retained income of 24.3 billion rubles
was to be used for actual fixed investment of 14 billion rubles 530
billion rubles of fixed investment in the national economy (see a, 4,
(a), above) less 100 billion rubles of budget-financed fixed investment
(see Appendix A) and 16 billion rubles financed from amortization allow-
ances (see f, below17, for planned capital repairs of 3.2 billion rubles,
and for a planned accretion to working capital of 10.8 billion rubles. Di
Actual retained income was only 19.5 billion rubles./11/ Deducting the
actual fixed investment figure and assuming a 2.5-billion-ruble fulfill-
ment for capital repairs, a shortfall of 7.3 billion rubles in working
capital accretions out of retained income emerges.
(3) Five billion rubles of working capital financed by
short-term loans of the State Bank. The 1953 entry represents the in-
crease in short-term credit of the State Bank of 5 billion rubles from
203 billion rubles on 1 January 1953 /2/ to 208 billion rubles on
1 January 1954. /Y
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c. Subsidy Receipts.
.(1) Machine Tractor Stations.
The 6.7-billion-ruble subsidy to the MTS's in 1953
is the difference between the operating expenditures of 15.5 billion
rubles and receipts of 8.8 billion rubles (see Appendix C).
(2) State Farms.
The 8.4-billion-ruble subsidy to state farms fi-
nances the deficit between the wage bill of 10.3 billion rubles (see A.,
2, a, (3), (a), above) plus other current outlays of 1.1 billion rubles
and the crop income of 3 billion rubles (see Appendix C).
d. Purchases from Other Sectors.
(1) State Reserves.
Revenues from sales of state reserves are estimated
at 8.8 billion rubles in 1953.
(2) Foreign Account.
This entry is a balancing item to offset the 3.6
billion rubles estimate of gold sales on foreign account (see C, 3, b,
(3), below). It represents the import balance on trade account.
e. Indirect Taxes.
(1) Turnover Taxes.
Turnover tax revenues were reported as 243.6 billion
rubles in 1953. 7.?2
(2) Miscellaneous Taxes.
These revenues include customs duties, reparations)
timber revenues, license and fee receipts, local taxes, and other minor
revenues. They are obtained by deducting identified revenues from
total real revenues.
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Identifiable revenues consist of profits taxes on
state enterprises (see g) (2)0 (a), below); tax on the incomes of enter-
prises and economic organizations (see g, (2)1 (b)) below); turnover
tax (see (1), above); social insurance funds (see g) (1), (b), below);
MTS revenues (see appendix C); State Reserve revenues (see d, (1))
above); direct taxes (see g) (1), (a), below); and purchases of the
state loan (see Al 2, f? (1)0 above). In 1953 these revenues amount
to 442.8 billion rubles.
Total real revenues are derived by deducting esti-
mated fulfillment of the fictitious budget entry for Retail Price
Deductions Di from the reported total revenue fulfillment of 539.7
billion rubles. L32/ This entry represents reductions in turnover tax
collections resulting from retail price reductions. These are in
effect "turnover taxes foregone," and it is assumed that fulfillment
of this item varied from plan in the same degree as did turnover taxes
actually collected. The latter were 101.3 percent of plan in 1953.
Application of this percentage to the plan figure of 43.2 billion
rubles for Retail Price Reductions yields an estimated fulfillment of
43.7 billion rubles. Real revenue fulfillment is thus estimated at
496 billion rubles.
The difference between total real revenues (496
billion rubles) and identified revenues (442.8 billion rubles) is con-
sequently 53.2 billion rubles.
f. Capital Consumption Allowances.
Amortization allowances of state enterprises are used
to finance new fixed investment and to finance capital repairs. On
the basis of data on the size and distribution of amortization allow-
ances of industrial ministries, L./ it is estimated that in the postwar
period ho percent of amortization funds have been used for new invest-
ment and 6o percent for capital repairs. By combining this estimate
with the estimate that 25 percent of capital repairs is financed from
the budget (see 3, c, (1), below), it is possible to calculate both
the amount of amortization allowances and the amount of capital repairs
financed from retained income of state enterprises.
In 1954 it was announced that the allocatinn of amorti-
zation funds for new investment was planned at 18.1 billion rubles.
Under the assumptions outlined above, allocation of amortization funds
to capital repairs would amount to 27.2 billion rubles and total amorti-
zation funds to 45.3 billion rubles. Total capital repairs in 1954 are
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estimated at 40.9 billion rubles. Qa/ Of this total, 10.2 billion rubles
have been estimated to come from the budget, and 27.2 billion rubles from
amortization funds. The remainder of 3.5 billion rubles is assumed to
come from retained income of state enterprises. .The percentage distri-
bution of sources of financing for capital repairs is then as follows:
amortization funds, 66.4; budget, 25; and retained income of state enter-
prises) 8.6.
To obtain 1953 estimates of total amortization funds
and their distribution, these percentages were applied to the 1953 capi-
tal repair figure of 33.6 billion rubles. L3L/ Amortization allowances
devoted to capital repairs are thus estimated at 22.3 billion rubles,
allowances used for new investment at 16 billion rubles) and total
amortization allowances at 37.2 billion rubles. Budget financing of
capital repairs is estimated at 8.4 billion rubles and financing from
retained income at 2.0 billion rubles.
g. National Income.
(1) Compensation of Employees and Members.
(a) Direct Incomes.
From total currently earned incomes of 635.3
billion rubles deduct military subsistence of 19.5 billion rubles
income in kind of 104.2 billion rubles, imputed rent of 8.3 billion
rubles, distributed profits of 2.3 billion rubles, and compensation
of government employees of 97.6 billion rubles (see C, 1, b, below),
to obtain the economic enterprise wage bill of 403.4 billion rubles
in 1953.
(b) Social Insurance.
Social insurance funds paid into the budget
amounted to 23.2 billion rubles in 1953. .8.2/
(2) Profits.
(a) State Enterprises.
Profits of state enterprises amounted to 89.8
billion rubles in 1953. L3../
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(b) Enterprises and Economic Organizations.
Profits of collective farms and cooperatives
are the sum of profit distributions of cooperatives, 2.3 billion rubles
(see A, 2, a, (5), above); retained incomes of collective farms, 9.2
billion rubles 81/ ; taxes on the profits of these organizations, 11.2
billion rubles (see 2, d, (2), below); and investments by cooperatives
out of retained income, 1.4 billion rubles. Lei These total to 24.1
billion rubles.
(3) Collective Farm Investment in Kind.
In 1953, collective farm investment in kind amounted
to 7.3 billion rubles. ?2/ These represent labor furnished by collective
farmers, self-produced construction materials, animal draft power used
In construction) and natural increases in collective farm livestock
herds.
2. Appropriation Account.
The appropriation account in the economic enterprise sector
of the basic national accounts of the USSR is shown in Account 4.*
a. National Income by Sector.
(1) Compensation of Employees.
(See c, below.)
(2) Collective Farm Surplus.
(See 1, g, (3), above.)
(3) Profits.
(See 1, g, (2), above.)
* Account 4 follows on p. 27.
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b. Income from Other Sectors.
Rental Receipts.
These receipts of 2.5 billion rubles represent
rental payments for urban housing by households (see A, 2, d, (2),
above).
c. Wage and Salary Payments.
(1) Direct Incomes.
(See 1, g, (1), (a), above.)
(2) Social Insurance.
(See 1, g, (1), (b), above.)
d. Direct Taxes.
(1) State Enterprises.
State enterprises paid 70.3 billion rubles of their
profits into the state budget in 1953. 22/
(2) Cooperatives and Collective Farms.
This revenue category includes a tax on the money
income and income in kind of collective farms, a tax on the income of
cooperative organizations, a levy on noncommodity activities, and sundry
payments by enterprises into the budget. Revenues in 1953 are estimated
at 16 percent of payments into the budget from profits of state enter-
prises, the same proportion that they represented in 1951 and 1952. 21/
e. Profit Distributions to Owners.
This entry represents the income of members of coopera-
tives from the distribution of profits of those organizations (see A, 2,
a, (5), above).
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Account 4
Appropriation Account in the Economic Enterprise Sector
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay
Wage and salary payments
Direct incomes
Social insurance
Subtotal
Direct taxes
State enterprises
Cooperatives and
collective farms
Subtotal
Profit distributions to
owners
Retained earnings
State enterprises
Collective farms and
cooperatives
Collective farm invest-
ment in kind
Subtotal
Total
4o3.4
23.2
426.6
70-3
11.2
81.5
3.3
19.5
io.6
7.3
37.4
248.8
Income
National income by sector
Compensation of employees
Direct incomes
Social insurance
Subtotal
Collective farm surplus
Profits
State enterprises
Collective farm
and cooperatives
Subtotal
Income from other sectors
Rental receipts
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4o3.4
23.2
426.6
LI
89.8
24.1
113.9
Statistical discrepancy 1.5
Total
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f. Retained Earnings.
(1) State Enterprises.
(See B, 1, g, (2), (a), above.)
(2) Collective Farms and Cooperatives.
Retained earnings of 10.6 billion rubles in 1953
include 9.2 billion rubles of collective farm retained income (see 1,
g, (2), (b), above) and investments of 1.4 billion rubles by coopera-
tives out of retained earnings (see 1, g, (2), (b), above).
(3) Collective Farm Investment in Kind.
(See 1, g, (3)) above.)
3. Capital Account.
The capital account in the economic enterprise sector of
the basic national accounts of the USSR is shown in Account 5.*
a. Retained Earnings.
(See 2, f, above.)
b. Capital Consumption Allowances.
(See 1, f, above.)
c. Capital Transfers from Government.
(1) Fixed Capital.
Government capital transfers to enterprises of 114.6
billion rubles in 1953 are obtained by deducting from total monetary
investments of enterprises -- 179.6 billion rubles (see 1, a, (4),
above) -- investments financed by amortization deductions of 37.2 bil-
lion rubles (see B, 1, f, above); by state enterprises retained earn-
ings of 13.5 billion rubles (see B, 1, b, above); by collective farm
retained earnings of 9.2 billion rubles (see B, 2, f, (2), above);
long-term credit of 3.7 billion rubles (see d, (2), below); and by
cooperatives from retained earnings of 1.4 billion rubles (see B, 1,
a, (4), above).
* Account 5 follows on p. 29.
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Account 5
Capital Account in the Economic Enterprise Sector
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay
Income
Gross enterprise investment
Retained earnings
Capital repairs
33.6
State enterprises
19.5
New capital investment
153.3
Collective farms
Additions to inventories
12.8
and cooperatives
10.6
Earnings in kind
7.3
Subtotal
37.4
Statistical discrepancy 2.5
Total
199.7
Capital consumption
allowances
Capital transfers from
government
Fixed capital
Working capital
Subtotal
Borrowing from government
Short-term credit
Long-term credit
Subtotal
Total
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37.2
13.4.6
4.3
118.9
5.0
3.7
8.7
199.7
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(2) Working Capital.
(See 1, b, above.)
d. Borrowing from Government.
(1) Short-Term Credit.
(See 1, b, above.)
(2) Long-Term Credit.
Long-term credits of 3.7 billion rubles represent
loans by the four long-term credit banks. Agricultural Bank loans to
collectives amounted to 2.6 billion rubles in 1953. 22/ Industrial
Bank loans are estimated at 0.1 billion rubles, on the basis of a 1954
statement that total loans grahted by the bank during 1941-53 amounted
to "more than 1 billion rubles." 21/ To these annual figures are added
1 billion rubles to allow for minor types of loans by the Agricultural
and Communal Banks and loans by the Trade Bank on which no information
is available.
e. Gross Enterprise Investment.
(1) Capital Repairs.
(See 1, fl above.)
(2) New Capital Investment.
New capital investment by economic enterprises
totaling 153.3 billion rubles in 1953 is composed of 146 billion rubles
of monetary outlays (see 1, a, (4), above) and 7.3 billion rubles of
investments in kind (see 1, a, (6), above).
(3) Additions to Inventories.
(See 1, b, above.)
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C. Government Sector.
1. Production Account.
The production account in the government sector of the
basic national accounts of the USSR is shown in Account 6.*
a. Value of Government Services.
To meet the quality constraint imposed upon the set of
accounts it is necessary to create a fictitious transaction selling
government services to the government appropriation account. These
services are valued at the cost of their inputs -- that is, compensa-
tion of government employees and purchases from enterprises.
b. Compensation of Employees.
The government wage bill of 97.6 billion rubles in 1953
is derived as follows:
(1) Military pay of 21.6 billion rubles (see A; 2, a,
(1), (c), above).
(2) Pay for employees in health and education of 52
billion rubles. In 1941 the average annual wage in health was 3,120
rubles and in education, 4,330 rubles. 2)21 If these wage levels in 1953
are assumed to have increased by the 201 percent for workers and employ-
ees in general, they are 6,270 and 8,700 rubles, respectively. Employ-
ment in 1953 in health activities is estimated at 2,395,000 and in edu-
cation at 4,250,000. 2V Multiplying 1953 wage rates by employment
yields a wage bill of 52 billion rubles.
(3) Administrative wage bill of 9.2 billion rubles.
Sixty-six percent of total administrative outlays of 13.9 billion ru-
bles 2Y is assumed to be wage costs, the relationship that prevailed
in 1955. 2//
(4) An internal security wage bill of 14 billion rubles
(see B, 1, a, (2), (d), above).
* Account 6follows on p. 33.
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(5) Trade union salaries of 0.8 billion rubles (see A,
2, a, (1), (d)? above).
c. Purchases from Enterprises.
This entry represents government purchases from enter-
prises on current account to carry out operational activities (see B,
1, a, (2), above).
2. Appropriation Account.
The appropriation account in the government sector of the
basic national accounts of the USSR is shown in Account 7.*
a. Income from Other Sectors.
(1) Indirect Taxes.
(See B., 1, e, above.)
(2) Direct Taxes.
(See A, 2, e, above.)
(3) Profits Taxes.
(See B, 2, d, above.)
(4) Social Insurance.
(See B, 1, g? (1), (b)? above.)
(5) Trade Union Receipts.
Trade union receipts will be assumed to
to expenditures of 4.5 billion rubles in 1953 (see A, 2, a,
above).
b. Purchase of Government Services.
(See 1, a, above.)
Account 7 follows on p. 33.
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be equal
(1), (d),
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Account 6
Production Account in the Government Sector
of the Basic National Accounts of the USSR
1953
Billion Rubles
. Outlay
Compensation of employees
Purchases from enterprises
Total
Income
97.6 Value of government
152.3 services
249.9 Total
Account 7
Appropriation Account in the Government Sector
of the Basic National Accounts of the USSR
1953
249.9
249.9
Billion Rubles
Outlay
Purchase of government
services
Transfers to households
Subsidy payments
Savings
Total
249.9
54.0
15.1
133.1
Income
Income from other sectors
Indirect taxes
Turnover tax
Miscellaneous taxes
Direct taxes
Profits taxes
243.6
53.2
46.1
State enterprises 70.3
Other 11.2
Social insurance 23.2
Trade union receipts 4.5
452.1 Total 452.1
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c. Transfers to Households.
(See A, 2) b) above.)
d. Subsidy Payments.
(See B) 1) cl above.)
e. Savings.
This entry represents the residual between total incomes
of the government from other sectors and purchases of services and
commodities, transfers to households) and subsidy payments to enter-
prises.
3. Capital Account.
The capital account in the government sector of the basic
national accounts of the USSR is shown in Account 8.*
a. Savings.
(See 2, e, above.)
b. Capital Transfers.
(1) Bond Sales to Households.
(See A, 2, f) (1)) above.)
(2) Increment in Savings Deposits.
(See A0 2, f, (2)) above.)
(3) Gold Sales on Foreign Account.
Gold sales abroad are estimated at 3.6 billion
rubles in 1953
(4) State Reserve Sales.
(See B) 1, d, (1), above.)
* Account 8 follows on p. 35.
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Account 8
Capital Account in the Government Sector
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay
Income
Transfers to other sectors
Savings
Capital transfers
133.1
Fixed investment
114.6
Working capital
4.3
Bond sales to households
11.8
Gold purchases
3.7
Increment in savings
State reserve accretions
9.2
deposits
12.3
Gold sales on foreign
Subtotal
131.8
account
3.6
State reserve sales
9.0
Lending
Subtotal
36.7
Enterprises
8.9
Households
o.6
Subtotal
Government investment
Purchases from enterprise
production account
7.4
Additions to cash balance 19.19
Statistical discrepancy 1.2
Total
169.8
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Total
169.8
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c. Transfers to Other Sectors.
(1) Fixed Investment.
(See B, 3, c, (1), above.)
(2) Working Capital.
(See B) 3, c? (2)) above.)
Gold Purchases.
(See B, 1, a) (5), (c), above.)
(4) State Reserve Accretions.
(3)
(See B) 1) a, (5), (b), above.)
d. Lending.
(1) Enterprises.
(See B) 1) a, (4)7 above, for long-term loans and
B., 1) b, above) for short-term loans.)
(2) Households.
(See A, 2, f, (3), above.)
e. Government Investment.
Purchases from Enterpriese Production Account.
(See B) 1, a) (5)) (a)) above.)
f. Additions to Cash Balance.
Soviet doctrine concerning the budget surplus states
that "great monetary reserves are formed as a result of the systematic
excess of revenues of the state budget over its expenditures" Z.,/ and
that the surplus "represents a supplementary source of expanding credit
investments in the national economy and serves as an important factor
in the long-run strengthening of the Soviet currency." These
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statements imply that the surplus, accruing in the State Bank as a
result of the excess of revenues over expenditures, is used in part
to finance short-term credit and in part to "strengthen the currency"
by effecting a deflationary reduction in the means of payment -- that
.is, cash balances of the population and bank balances of economic
organizations. The former part of the surplus has been assumed equal
to the estimated increase in State Bank credit. The latter part,
equal to total surplus (24.9 billion rubles 122/) less the portion
devoted to short-term credit, is entered in this account.
D. Foreign Sector.
1. Production Account.
The production account, the appropriation account, and the
capital account in the foreign sector of the basic national accounts
of the USSR are shown in Account 9.*
a. Import of Goods and Services.
(See B2 12 dy (2), above.)
b. Balance on Production Account.
This is the balancing item for a, above.
2. Appropriation Account.
a. Surplus on Current Account.
This is the balancing item for b; below.
b. Balance on Production Account.
(See Bj 1, d, (2), above.)
3. Capital Account.
a. Transfers from Rest of World to Government Sector.
This is the balancing item for bj below. (See CI 3,
bj (3); above.)
* Account 9 follows on p. 38.
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Account 9
Production Account, Appropriation Account, and Capital Account
in the Foreign Sector of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay Income
Production Account
Export of goods and services 0 Import of goods and services 3.6
Balance on production
' Total 0 account -3.6
Total 0
Appropriation Account
Balance on production Surplus on current account -3.6
account -3.6
Net factor payments to Total -th
nation 0
Total -1.3Z-,
Capital Account
Surplus on current account -3.6 Transfers to rest of world
Transfers from rest of by government 0
world to government sector 3.6
Total 0
Total 0
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b. Surplus on Current Account.
(See 21 a, above.)
E. Consolidated Sectors.
The production account in the consolidated sector accounts of
the basic national accounts of the USSR is shown in Account 10.*
1. Production Account.
a. Depreciation.
(See B, 1, f) above.)
b. Indirect Taxes -- Subsidies.
(1) Indirect Taxes.
(See Bo 11 e, (1)1 above.)
(2) Miscellaneous Taxes.
(See B? 1, el (2), above.)
(3) Subsidies.
(See B, 11 c) above.)
c. Value Added.
(1) Households.
From total income of 635.3 billion rubles earned
in 1953 (see A0 2? al above) deduct 2.3 billion rubles of distributed
profits (see A, 21 al (5)1 above).
(2) Social Insurance.
(See B1 1, 131 (1), (b), above.)
* Account 10 follows on p. 41.
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(3) Enterprises.
(See B, 1,
8,
(2)) above.)
d. Sales to Household Consumption.
(See A) 2) c and d, above.)
e. General Government Purchases of Goods and Services.
From total government purchases of goods and services
of 249.9 billion rubles in 1953 (see C, 2, b, above) deduct 4.5 billion
rubles of trade union outlays already included under sales to consump-
tion as trade union dues.
f. Gross Domestic Investment.
(1) Households.
(See Al 3, c, above.)
(2) Enteririses.
(See B) 3, e) above.)
(3) Government.
Government investment in 1953 is the sum of 4.9
billion rubles of fixed investment (see C, 3, e, above) and a net in-
vestment of 0.6 billion rubles in state reserves and gold purchases.
g.
Foreign Balance on Production Account.
(See DI 2) b) above.)
2. Appropriation Account.
The appropriation account in the consolidated sector
accounts of the basic national accounts of the USSR is shown in
Account 11.*
* Account 11 follows on p. 42.
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Account 10
Production Account in the Consolidated Sector Accounts
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay
Depreciation
Indirect taxes -- subsidies
Indirect taxS
Miscellaneous taxes
Subsidies
Subtotal
Value added
Households
Social insurance
Enterprises
Subtotal
Gross national
product
Income
36.3 Sales to household
consumption 635.5
General government
243.6 purchases of goods
53.2 and services 245.4
-15.1 Gross domestic investment
281.7 Households
Enterprises
Government
633.0
23.2
113.9
770.1
1.088.l
Subtotal
Foreign balance on pro-
duction account
1.2
199.7
7.4
208.3
-3.6
Statistical discrepancy 2.5
Gross national
product
10881
The item listed as savings is a balancing item representing
the difference between net national income and net national expenditures.
3. Capital Account.
The capital account in the consolidated sector accounts of
the basic national accounts of the USSR is shown in Account 12.*
* Account 12 follows on p. 42.
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Account 11
Appropriation Account in the Consolidated Sector Accounts
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay
Income
Household consumption
635.5
National income
Government purchases of
goods and services
245.4
Households
656.2
Savings
170.9
Enterprises
113.9
Subtotal
770.1
Indirect taxes and
subsidies
Indirect taxes 243.6
Miscellaneous taxes 53.2
Subsidies -15.1
Subtotal 281.7
Net national product 1,051.8 Net national product 1,051.8
Account 12
Capital Account in the Consolidated Sector Accounts
of the Basic National Accounts of the USSR
1953
Billion Rubles
Outlay Income
Gross domestic investment 208.3 Depreciation 36.3
Savings 172.0
Total
208.1 Total 2.011.1
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The item listed as savings is a balancing item representing
the difference between gross domestic investment and depreciation allow-
ances.
III. Gross National Product by End Use and Sector of Origin.
A. Gross National Product by End Use.
1. Derivation in Established Prices.
The Soviet GNP for 1953 has been distributed among four
end-use categories according to a classification of entries from the
sector accounts and from the budget appendix shown in Table 1.* The
entries are taken from the consolidated production account, with sales
to household consumption being classified as consumption and gross
domestic investment as investment. General government purchase of
goods and services, however, must be distributed among all four end
uses. In order to do so, it is necessary to utilize budget and sector
table entries.
The Soviet GNP for 1953 as distributed by end use in
current prices is shown in Table 2.**
2. Derivation in Adjusted Rubles.
As has been noted at length in a previous report, 121/ a
large portion of the turnover tax should be regarded as a payment for
uncompensated factor services in agriculture. In order to determine
the effect of this adjustment on the end use distribution of GNP) it
is first necessary to estimate the incidence of tax on each component
and then to determine what portion of the tax represents payment for
land rent (see Table 3***).
It is assumed that turnover tax is applicable to the
following expenditure categories:
a. Household retail purchases from state and cooperative
outlets (see II, A, 2, c, (1), above).
on p.
44.
Table 1 follows
**
Table 2 follows
on p.
46.
***
Table 3 follows
on p.
47.
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Table 1
Classification of Soviet Gross National Product
by End Use
1953
Billion Rubles
End Use
Consumption 713.7
Household sales 2/
Health and education outlays 12/
Other budget outlays 2/
635.5
75.9
2.3
Administration 28.8
. Government administration di
Internal security 2/
Other budget outlays f/
12.5
14.0
2.3
Defense 129.9
Budgetary defense expenditures
Other national economy outlays
of budget gi
Internal security a/
105.0
17.9
7.0
Investment 214.3
Gross domestic investment 2/
Other national economy outlays
of budget gi
208.3
6.0
Unallocated ga
Other budget outlays Li 2.3
a. See consolidated sector accounts (II, E., above).
b. Health and education expenditures less capital
investment outlays (see II, B, 1, a, (2), (c)? above).
c. These outlays largely represent allocations to the
Soviet Red Cross. They are estimated to be a third of
"other government outlays."
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Table 1
Classification of Soviet Gross National Product by End Use
1953
(Continued)
d. There are explicit budgetary allocations to govern-
ment administration less investment outlays (see II, B,
1, al (2), (e) above).
e. One-third of the internal security forces are assumed
to represent militarized border troops. Therefore: a
similar proportion of the internal security appropriation
is also considered as a defense expenditure.
f. These outlays represent costs of conducting elections
and. are estimated to amount to a third of "other govern-
ment outlays."
g. Three-quarters of the residual expenditures in the
budget category Financing the National Economy (see B;
12 a, (2), (f), above) are assumed to represent research
and developmental outlays for nuclear energy. The
remaining quarter comprises investment in nuclear energy
production facilities, subsidies to industry, and research
and development expenditures in fields other than nuclear
energy.
h. It is not possible to allocate specifically the
remaining third of "other government outlays."
b. The material inputs for health and education expendi-
tures (see II, B2 12 a, (2), (c), above).
c. Forced labor subsistence (see II, A, 2, c, (7), above).
d. Petroleum products used in agriculture. Egi
e: Purchases from the enterprise sector for internal secur-
ity (see II, B, 1, a, (2)2 (d)? above).
f. Military subsistence payments (see II, Al 2, (c), (6),
above).
g. Petroleum products purchased by the armed forces.
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Table 2
Soviet Gross National Product, by End Use,
in Current Prices
1953
End Use
Billion Rubles Percent of GNP
Consumption 713.7
Administration 28.8
Defense 129.9
Investment 214.3
Total allocated GNP 1,086.7
Unallocated 2.3
Total domestic GNP 1,089.0
Foreign balance -3.6
Total GNP 1,085.4
Statistical discrepancy 2/ 0.9
Reconciliation 1,086.1
65.7
2.7
11.9
19.7
100.0
a. See II, El 1, p. 39, above.
h. One-third of state reserve accretions (see II, B, 1;
a; (5)y (b), above). These are assumed to represent reserves of con-
sumer goods.
i. One-half of increments to working capital (see II, B;
1, b, above). These represent consumer goods in inventories or as goods
in process.
To compute the general rate of taxation, total turnover
tax collections for 1953 -- 243.6 billion rubles -- must first be divided
by the total turnover upon which the tax is assessed -- 492.8 billion
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Table 3
Adjustment of End Use Magnitudes
for Soviet Turnover Tax
1953
Billion Rubles
Sector
Taxable
Amount
Tax
Liability
Tax Deducted as
Nonfactor Payment
Consumption
Household retail
purchases
396.5
195.9
70.5
Communal
services
23.9
11.8
4.2
Forced labor
subsistence
8.5
4.2
1.5
Petroleum used
in agriculture
5.5
2.7
1.0
Total
434.4
214.6
77.2
Administration
Internal security
Defense
111LI
Military subsistence
19.5
9.6
3.5
Purchase of petroleum
products
4.1
' 2.0
0.7
Total
23.6
11.6
4.2
Investment
Stockpiles
3.0
1.5
0.5
Inventories
6.4
3.2
1.2
Total
2211
1:2
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rubles. It is necessary to deduct income in kind and collective farm
market sales from taxed turnover for the purpose of making this compu-
tation; as no explicit tax is levied on these consumption components.
The result of the above computation is a rate of 49.4 percent.
The turnover tax adjustment reduces the share of Con-
sumption in GNP to 63.4 percent and raises that of defense to 12.5
percent and of investment to 21.4 percent; whereas that of administra-
tion remains constant (see Table 4*).
B. araLliLtilaia_l Product 12L2m_tot...-of Origin,1953.
In order to determine the division of GNP by sector of origin
(see Table 5**)1 it is necessary to calculate the value-added contribu-
tion of each sector. In the procedure adopted; value added has been
derived for all sectors but industry; which emerges as the residual
when the value-added contributions of the six other sectors are deducted
from GNP at factor cost.. In this calculation the GNP control total is
the factor cost (1,004.6 billion rubles) rather than the market price
total (1;089.2 billion rubles). Since value added is the sum of factor
costs (labor; depreciation charges, profits, and rent) at each stage
of production, the GNP control total should contain these production
elements but exclude indirect taxes which are not identifiable factors
of production.
1. Agriculture.
Value added in agriculture amounts to 328.9 billion rubles
and is distributed as shown in the following tabulation:
* Table 4 follows on p. 50.
** Table 5 follows on p. 51.
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Billion Rubles
State farm and MTS wages
16.6
Money payments to collective farmers
18.6
In-kind income discounts
2.5
Net income from sale of farm products
33.1
Income in kind
104.2
Imputed rent
7.0
Collective farm savings
16.5
Rent payment component of turnover tax
155.9
Subtotal
354.4
Trade expenses
4.0
Less
Home processing
21.5
Total
328.9
The deduction for trade expenses represents the value added
in collective farm market trade. It is the same proportion, 8 percent,
that costs comprise of state trade turnover. The deduction for home
processing represents the estimated proportion of income in kind which
is industrial rather than agricultural in nature. (For derivation,
see Appendix C.)
2. Construction.
Total capital investment in 1953 was 205 billion rubles
(see II, C, 3, d; II, B? 3, e; and II, Al 3, c, above). Sixty-three per-
cent of these outlays -- 129.2 billion rubles -- consists of construc-
tion costs. 1211/ Forty-four percent of construction outlays is accounted
for by labor, amortization, and overhead charges. 12g Value added in
construction becomes 56.8 billion rubles.
3. Transportation.
In 1951, value added in transportation amounted to 64.2
billion rubles. To obtain a 1953 estimate, the 1951 figure is increased
by 18 percent to account for expanded traffic and by 5 percent to adjust
for the increase in money wages. 12g Value added in 1953 is therefore
79 billion rubles.
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Table 4
Soviet Gross National Product, by End Use,
Adjusted for Turnover Tax 2/
1953
End Use
Billion Rubles
Percent of GNP
Consumption
636.5
63.5
Administration
27.5
2.7
Defense
125.7
12.6
Investment
212.6
21.2
Total GNP at factor cost
1,002.3,
100.0
a. These estimates of GNP differ from other estimates
because of a differing estimate of the amount in-
cluded in factor cost for factors of production in the USSR which
are not actually compensated -- chiefly agricultural land rent and
other agricultural capital charges. The estimate for these uncom-
pensated factor's was calculated on the assumption that
the farmers' share of the consumers' expenditure (gross value of
farm output as a percent of the retail value of agricultural prod-
ucts) is the same in the USSR as the average for US farmers dur-
ing the postwar period.
The estimate in this report also uses a US analogy but makes
allowance for the heavy emphasis of the USSR on grain production
and the much less extensive processing of agricultural products
in the USSR. The result is a much larger allowance for uncom-
pensated factors, a larger GNP in rubles of factor cost, and a
larger percentage of consumption in GNP.
4. Communications.
Total revenues of Soviet communications activity amounted
to 5.7 billion rubles in 1953. 10/ Of this total, 1.1 billion rubles
were used for capital investment. AM/ It is assumed that remaining
revenues of 4.8 billion rubles were used to compensate employees and
to amortize capital equipment.
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Table 5
Gross National Product of the USSR
by Sector of Origin
1953
Sector
Billion Rubles
Percent of GNP
Industry
299.9
29.9
Construction
56.8
5.7
Agriculture
328.9
32.8
Transportation
79.0
7.9
Communications
4.8
0.5
Trade
57.8
5.7
Services
175.1
17.5
Total GNP at factor cost
1,002.3
100.0
5. Trade.
In 1953, costs comprised 8 percent of retail trade turn-
over. lig/ Applying this percentage to total turnover of 480.7 billion
rubles see I, B, 4, a and b, above) yields a retail trade value added
of 38.5 billion rubles. It will be assumed that value added in Soviet
wholesale trade amounts to half of that generated in retail activities.
Given this .assumption, value added in trade becomes 57.8 billion rubles.
6. Services.
Value added in services amounts to 179.2 billion rubles
and is composed of the following entries:
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Billion Rubles
Education and health wage bill
52.0
Military pay and subsistence
41.1
Government administration wage bill
9.2
Internal security wage bill
14.o
Trade union wage bill
0.8
Housing outlays
26.3
Personal services
31.7
Total 175.1
7. Industry.
The value added for industry of 299.9 billion rubles in
1953 is derived as a residual by deducting from GNP at factor cost the
value-added sum for the other 6 sectors.
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APPENDIX A
SOVIET NATIONAL ACCOUNTS, 1953: GOVERNMENT EXPENDETURES
1. Derivatipn of a Residual in Financing the National Economy.
Total budgetary outlays for Financing the National Economy amounted
to 180.4 billion rubles in 1953. i12/ The following entries are deducted
to obtain residual outlays of 24. billion rubles:
a. Fixed investment of 100 billion rubles. It is assumed that the
fixed investment expenditures goal was fulfilled to the same extent,
93.7 percent, as that for total national economy outlays. 11?/
b. Capital repairs of 8.4 billion rubles. By analogy with prewar
data 111/, 25 percent of total capital repairs (see II, B, 1, f, above)
are financed by the state budget.
c. Working capital expansion of 4.3 billion rubles. Planned bud-
getary outlays amounted to this amount (see II, B, 1, b, (1), above).
d. Gold purchases of 3.7 billion rubles (see II, B, 1, a, (5), (c),
above).
e. MTS operating expenditures of 15.5 billion rubles. This repre-
sents the difference between total allocations to the NTS and alloca-
tions for investment purposes. 11Y
f. State reserves purchases of 9.2 billion rubles (see II, B, 1,
a, (5), (b), above).
g. Agricultural research and developmental outlays of 8.4 billion
nines. These expenditures include funds for experimental stations,
general projects in afforestation and irrigation, and some operating
expenditures of state farms. They are determined by deducting from
total allocations to agriculture estimates for fixed investment, expan-
sion of working capital, and MTS operating expenditures. 112/
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h. Miscellaneous administrative expenditures of 6.1 billion rubles.
These consist of expenditures which finance investment planning organi-
zations and a number of minor organizations, including the Chief Direc-
torate of Hydmmeteorology? the Ministry of Automobile Transport and
Highways, and the Chief Directorate of Geodosy and Cartography.
(1) In 1951, expenditures of 3.7 billion rubles were authorized
for investment planning organizations. 11/ This figure was moved by
an index of planned investment to obtain an estimate of 4.4 billion
rubles for 1953.
(2) The estimate of 1.7 billion rubles for expenditures on the
indicated minor activities is based on 1941 data, with an allow-
ance for the increase in wages and prices since 1941 and the trend of
expenditures in the residual portion of the budget category Financing
the National Economy in which these expenditures are located. 11L/
2. Derivation of a Residual in the Unspecified Portion pf the State
Budget..
Total Soviet state budget expenditures amounted to 514.8 billion
rubles in 1953. 112/ In addition) there was a budget surplus of 24.8
billion rubles. The following items are deducted to obtain residual
outlays of 6.6 billion rubles:
a. Fictitious expenditures of 43.7 billion rubles) assumed to be
equal to fictitious revenues of a like amount. 122/
b. Expenditures for Financing the National Economy of 180.4 billion
rubles. 121/
c. Communal services outlays of 87.7 billion rubles. These include
education outlays of 61.1 billion rubles and health expenditures of 26.6
billion rubles (see II, A, 1, a, (2)) (c), -above) and student stipends
of 5.8 billion rubles (see II) A) 2) b., (2), below).
d. Administrative outlays of 34.9 billion rubles. These include
general administrative expenditures of 13.9 billion rubles and internal
security allocations of 21 billion rubles (see II) Al 1) a) (2), (d))
above).
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e. Defense expenditures of 105 billion rubles (see II, A, 1, a,
(2), (b)? above).
f. Allocation of 8.7 billion rubles for expansion of bank capital.
This includes 5 billion rubles for expansion of short-term loans by the
State Bank (see II, B, 1, .(b), (3), above) and 3.7 billion rubies for
additional long-term loans by the 4 specialized banks (see II, A, 2, b,
(1), above).
g. Pensions and allowances of 41 billion rubles (see II, Al 2, b?
WI above).
h. Interest payments of 7.2 billion rubles. These include 5.2
billion rubles of interest payments to individuals (see II, A, 2, b,
(3), above) and 2 billion rubles to organizations (see II, A, 2, b,
(3), above).
i. Increase in government cash balances of 19.9 billion rubles
(see II, C, 3, f, above).
j. Debt retirement of 4.5 billion rubles (see II; A/ 2, f, (1),
above).
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APPENDIX B
SOVIET NATIONAL ACCOUNTS, 1953:
DERIVATION OF PORTION OF INCOME IN KIND
COMPRISED IN INDUSTRIAL ACTIVITY
In 1953 the total amount spent for purchases of fresh meat was 83.8
billion rubles, valued at retail prices. 122/ According to Table 6,*
45 percent of total sales of fresh meat in volume terms, or 37.7 billion
rubles, was transacted in state and cooperative retail outlets. Accord-
ing to Table 8,** the cost to the state for obligatory requisitions and
above-quota purchases of meat was 7 billion rubles. The average turn-
over tax on fresh meat sold at retail in 1953 was 23 percent, 123? or
8.6 billion rubles. If the usual trading margin of 8 percent) 12_,/
or 3 billion rubles, is assumed to apply, the cost of processing meat
becomes 19 billion rubles (37.7 -7,0 -8.7 -3.0 = 19.0). In volume
terms, 73.3 percent as much meat was consumed by producers as income
In kind as was disposed through state channels (see Table 8). Apply-
ing this proportion to the total cost of processing meat sold at retail
yields an imputed industrial processing cost of 13.9 billion rubles
for meat consumed in kind.
In 1953 the total amount spent for milk, butter) and cheese amounted
to 57 billion rubles, 125/ valued at retail prices. Sixty percent, or
34.2 billion rubles, of all milk and dairy product sales in volume terms
was transacted in state and cooperative retail outlets. The cost to
state agencies for obtaining milk and dairy products through obligatory
deliveries or above-quota purchases amounted to 3.7 billion rubles (see
Table 8). The average turnover tax on milk and dairy products was 50
percent) 126/ or 17.2 billion rubles. Applying the average trading
margin of 8 percent yields distribution costs of 2.7 billion rubles.
The cost of processing milk and dairy products is therefore 10.6 billion
rubles (34.2 -3.7 -17.2 -2.7 = 10.6). In volume terms, 71.7 percent as
much milk and dairy products was consumed by producers as income in kind
as was sold through retail channels (see Table 6). Applying this pro-
portion to the total cost of processing milk and dairy products sold at
retail yields an imputed industrial processing cost for income in kind
of consumption of 7.6 billion rubles.
Imputed industrial processing cost for meat and dairy products
consumed as income in kind is therefore 21.5 billion rubles.
* P. 60, below.
** P. 62, below.
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APPENDIX C
SOVIET NATIONAL ACCOUNTS, 1953: AGRICULTURAL INCOME
1. Estimation of Agricultural Income by Marketing Channel.
As a check upon the agricultural income data which are derived in
aggregative terms from official pronouncements and as a means of esti-
mating MTS incomes, which are not otherwise available, an alternative
procedure has been employed to estimate agricultural income. Essentially
the method involves the valuation of farm output by crop within each
marketing channel. The calculation proceeds by three stages, as follows:
(a) Total output for each major crop is distributed by marketing channel
in percentage terms (see Table 6*); (b) per unit prices for each crop
by marketing channel are estimated (see Table 7**); and (c) the physi-
cal distribution of crop by marketing channel is then valued (see
Table 8***).
Total receipts from obligatory deliveries and sales to the state by
collective farms and farmers are computed at 33.7 billion rubles instead
of the 32 billion rubles given in official announcements. This differ-
ence can be easily explained by margins of error in the distribution of
crops by marketing channel and the prices at which they are transferred.
The income of the MTS's from payments in kind is estimated at 8.8 billion
rubles. Collective farm market incomes from the sale of food products
are computed to be 49.8 billion rubles compared with the official figure
of 50.5 billion rubles for receipts from sales of all products. Income
in kind is estimated at 104.3 billion rubles.
2. Notes on Table 8.
Prices of crops and livestock products consumed by producers are
valued as the weighted averages of the prices of such commodities mar-
keted through state purchases and collective farm market sales, except
for grai%in which only the state purchase prices are used.****
Table 6 follows on p. 6o.
Table 7 follows on p. 61.
Table 8 follows on p. 62.
Continued on p. 66.
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Table 6
Distribution of Agricultural Crops in the USSR
by Marketing Channel
1953
Percent of Marketed Share Di
Crop
Marketed Share 2/
(Percent of Total)
Obligatory
Deliveries
State
Purchases
Sovkhoz
Deliveries
MTS
Receipts
Collective
Farm Market 2/
Consumption
by Producer 2/
(Percent of Total)
Nonhuman 2/
Use
(Percent of Total)
Bread grains
33
25
8
13 .
53
1
41
26
Meat products-
30
15
3.6
39
33
0
Dairy products
48
45
15
17
23
43
9
Potatoes
19
4o
3.6
It
4o
34
47
Vegetables
38
30
15
0
0
55
62
0
Eggs
43
46
3
0
0
51
46
11
Poultry
60
58
6
0
0
36
4o
0
Sugar beets
100
0
55
o
45
o
o
o
Wool
83
50
9
41
0
0
17
0
Cotton
100
0
16
o
24
0
0
0
Flax
65
93
o
7
o
35
0
Sunflower seeds
70
75
0
25
0
26
4
a. CIA estimates.
b. 127/
c.
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Table 7
Agricultural Prices in the USSR
1953
Rubles per Unit
Crop
Unit
Obligatory
Deliveries
State
Purchases
Sovkhoz
Deliveries
Collective ,
Farm Market 2/
Wheat hi
Rye hi
Cattle, sheep 2/ li 2/
Hogs 2/ 4/ 2/
Milk 4/
Potatoes 4/_,/
Vegetables e si
Eggs 2/ gi
Poultry g
Sugar beets hi
Wool g e
Cotton bf
Flax
Sunflower seeds 12/
centners
centners
kilograms
kilograms
kilograms
kilograms
metric tons
tens
metric tons
metric tons
centners
metric tons
centners
metric tons
10
8
0.27
1.5
0.58
3.2
0.33
0.55
0.15
N.A.
N.A.
910
f/
1,330
f/
N.A.
N.A.
120
100
3.15
4.10
5-38
7.0
0.64
1.35
0.27
250
2.5
6,540
93 hi
N.A.
3,400 hi
1,400
275..t/
47
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
E./
1./
.f./
f/
N.A.
N.A.
N.A.
300
300
13
13
18
19
2.9
2.4
1.6
2,000
12
20,000
El
EJ
N.A.
a.
b. Obligatory delivery, state purchase, and sovkhoz delivery prices are CIA estimates.
c. Seventy percent of 1953 marketings at higher prices.
d. Obligatory delivery and state purchase prices1
e. Obligatory and state purchase prices
f. Not applicable.
g.
h. Contract price.
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Table 8
Agricultural Incomes in the USSR
1953
Collective Farms and Household Plots
Commodity
Output
(Thousand
Metric Tons) E4/
Marketed Output
(Thousand
Metric Tons)
Obligatory Deliveries
(Thousand Metric Tons)
Value of
Obligatory Deliveries
(Million Rubles)
Grains
82,900
37,000
9,250
860.3
Beef
3,270
2,190
756
1,081.0
Pork
2,631
1,763
609
1,473.7
Mutton, lamb
1,690
1,132
391
559.1
Milk
22,400
10,752
4,838
2,128.7
Potatoes
66,400
12,616
5,046
756.9
Vegetables
Poultry
16,000
1420
6,o8o
252
12/
146
12/
133.9
Eggs (millions)
14,000
6,020
121
bJ
Sugar beets
22,300
22,300
2/
Cotton
Wool
3,900
230
3,900
191
El
152
2/
2,022.0
Flax
2,059
1,338
12/
Sunflower seeds
5,929
4,150
3,859
1,1111.3
Total
10,156.9
* Footnotes for Table 8 follow on p. 65.
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Table 8
Agricultural Incomes in the USSR
1953
(Continued)
Collective
Farms and Household Plots (Continued)
Commodity
State Purchases
(Thousand
Metric Tons)
. Value of
State Purchases
(Million Rubles)
Payments to MTS's
(Thousand
Metric Tons)
Value of
Payments to MTS's
(Million Rubles)
Grains
2,960
3,353.7
19,610
1,823.7
Beef
329
1,223.9
350
500.5
Pork
264
1,718.6
282
682.4
Mutton, lamb
170
649.4
181
455.4
Milk
1,613
1,613.0
1,828
804.3
Potatoes
2,018
544.9
565
75.0
Vegetables
1,824
623.9
Poultry
15
98.1
Eggs (millions)
2,769
745.0
Sugar beets
12,265
1,14o.6
10,035
933.3
Cotton
Wool
Flax
2,964
sI
1,244
10,076.0
2? A
936
94
3,182.4
131.6
Sunflower seeds
2/
291
80.0
Total
23,528.7
8,807.1
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Table 8
Agricultural Incomes in the USSR
1953
,(Continued)
Collective Farms and Household Plots (Continued)
Commodity
Collective Farm
Market Sales
(Thousand Metric Tons)
Value of Collective
Farm Market Sales
(Million Rubles)
Consumption
by Producer
(Thousand Metric Tons)
Value of Consumption
by Producer
(Million Rubles)
Nonhuman Use
(Thousand
Metric Tons)
Grains
370
1,110.0
12,200
1,415.8
33,800
Beef
755
9,815.0
1,080
12,960.0
o
Pork
608
10,944.0
868
14,756.0
o
Mutton, lamb
300
3,900.0
642
7,704.0
o
Milk
2,473
5,937.6
9,632
20,034.6
2,016
Potatoes
5,046
8,073.6
22,576
27,542.7
31,208
Vegetables
2,371
4,742.0
9,920
9,920.0
0
Poultry
91
1,820.0
168
2,184.0
o
Eggs (millions)
3,160
3,476.0
6,44o
5,796.0
1,540
Sugar beets-
o
o
o
o
o
Cotton
o
o
o
o
o
Wool
0
o
39
519.0
o
Flax
0
o
721
.1,009.4
o
Sunflower seeds
N.A.
N.A.
1,541
423.8
237
Total
49,818.2
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Table 8
Agricultural Incomes in the USSR
1953
(Continued)
State Farms
Commodity
Value of Deliveries
(Million Rubles)
Grain
625.3
Meat
265.0
Milk
564.0
Potatoes
150.0
Wool
800.0
Other
549.7
Total 2,954.0
a. all
b. All sales to state in form of obligatory
deliveries and state purchases valued at state
purchase prices.
c. All sales to state in form of obligatory
deliveries and state purchases valued at
obligatory delivery prices.
d. 1221/
e. All sales of cotton and sugar beets are made
at contractual prices.
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The basis for this approach is that the decision whether or not to con-
sume the farm's own product is governed by the money income which may
be obtained from voluntary sales after obligatory delivery quotas and
MTS payment have been satisfied.
Prices of crops and animal products transferred to the MTS's are
the same as state obligatory delivery prices. This valuation is in
accord with official Soviet procedure.
The lack of information on obligatory delivery prices for eggs,
vegetables, and flax made it necessary to estimate all state monetary
acquisitions of these crops at the higher state purchase prices. Simi-
larly it was necessary to value wool acquisitions at the lower obliga-
tory delivery prices. State farm incomes are based on estimates of
proportions of total proportions of state procurement obtained from
state farms.
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APPENDIX D
CONCEPTUAL FRAMEWORK OF THE SOVIET NATIONAL ACCOUNTS
Earlier studies in the area of Soviet national income had as their
main objective the estimation of a single number, gross national product.
This was a measure of the goods and services made available to the USSR
for consumption or investment (including replacement of capital consumed
In the production process). To arrive at such a measure remains a prin-
cipal object of the work conducted in this field. '
With the expansion of knowledge of the Soviet economy and a growing
body of data for the USSR, however, new objectives have been added. More
stress is now laid on the analysis of the national income into its com-
ponents and on the measurement of transactions between different parts
of the economy. To provide a conceptual frame of reference, within
which this further analysis of the Soviet economy could be carried,
a new set of national economic accounts was adopted.
The goal was to obtain a system of accounts which would not only
permit a measurement of size but also, within the scope allowed by the
data, facilitate the study of the structure of the Soviet economy and
focus on basic economic activities. The accounting system employed in
this report is a modification of the structure of accounts proposed by
the Organization for European Economic Cooperation (OEEC) 112/ and the
UN 13g and closely approaches those used by the UK. 1
The statistics which are presented in this report are related to
a system of accounts which is based upon a twofold classification of
economic transactions (monetary and nonmonetary -- that is, by trans-
actors and by economic activity). It must be recognized that the
transactions which take place within an economy, and between economies,
may be classified in many different ways -- by transactors, commodities
involved, financial arrangements, economic activity, and the like.
Although all of these possible classification systems would be of use
for the purposes of economic analysis, the relative paucity of data
for the Soviet economy forces only the most rudimentary classification.
The extremely large number of individual transactors within an
economy tend to fall into distinguishable classes. It is useful to
group together these classes into distinct sectors) such as households,
economic enterprises) and general government, and to establish a
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separate set of accounts for each of these sectors. This broad grouping
of sectors could be extended by increasing the number of classes within
each group which are regarded as distinct. For example, the enterprise
sector could be subdivided by industry, households by principal source of
income, and government by type of authority.
The definition of the three basic sectors is as follows:
1. Economic enterprises include all organizations and institutions)
regardless of ownership, which produce goods and services for sale at
a price intended approximately to cover the cost of production. Included
in this class would be:
(a) Individuals established on their own account and independent
professional men (domestics excluded).
(b) All households and other institutions in their capacity of
landlords whether or not they occupy their own properties.
(c) Enterprises organized on a cooperative basis.
2. Households comprise all individuals who are normal residents.
Also included within this class are those private nonprofit institutions
such as associations and clubs which are maintained principally through
fees and dues from members, and domestics.
3. General government comprises government agencies, whether cen-
tral, state, or local, which undertake such activities as administra-
tion, education, defense, and health services. These are organized
for, but not normally sold to, the community. It is convenient to
include here those social security arrangements which may be regarded
as an instrument of the social policy of the government.
Three major forms of economic activity may be distinguished:
production) consumption, and capital accumulation. Corresponding to
each of these activities an account may be set up for each sector: a
production account, a consumption or appropriation account, and a capi-
tal (reconciliation) account. To maintain duality, or the "double
entry" aspect, it is necessary to establish a fourth, or external,
account. The external account of each sector would have entered the
external transaction (transactions with other sectors) of the sector.
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In this way, every entry within the set of accounts for a given sector
would be matched with a corresponding entry (of opposite sign) in that
set of accounts.
The content of these accounts is as follows:
1. The production account of a sector presents the revenues
and expenses connected with its productive activity. On the credit
side are included sales, production for its awn use, increases in inven-
tory, and production subsidies. On the debit side are the expenses of
production including materials purchased from outside the sector, the
value of materials produced for awn use, indirect taxes, and the pro-
visions for the consumption of fixed capital. The remaining item on
the debit side of the account is the factor income generated within
the sector. This includes the compensation of employees, interest,
rent, and operating profit.
2. The appropriation account has on its credit side factor
income transferred from the production account and other income received
by the sector. On the debit side this account presents the appropria-
tions to current outlays which may be income payments, current transfers
(including direct taxes), consumption, and savings.
3. The capital account includes on the credit side savings,
transferred from the appropriation account; depreciation, transferred
from the production account; capital transfers; and borrowings from
other sectors of the economy and from foreign economies. The debit
side of this account includes the capital formation of the sector,
capital transfers, and lending to other sectors and economies.
4. The external account contains as credits all of the debit
items of the other accounts of the sector which are not also credit
items of those accounts. Similarly, it contains as debits all of the
credit items of the other accounts which are not also debit items of
one of those accounts of the sector.
The purpose of grouping the transactions which take place
within an economy by sector and account is to achieve a meaningful pic-
ture of the structure of that economy. It is possible to introduce
further distinctions among the transactions within the existing struc-
ture of sectors and accounts. For example, it is desirable for
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analytical purposes to distinguish between transactions involving goods
and services and those representing the purchase of financial claims
and transfers.
The general form of accounts for a sector appears below.
Production Account
Debits
Purchase of materials from
outside the sector
Cost of production of
materials for own use
Indirect taxes
Depreciation allowances
Factor income of sector
consisting of
Compensation of
employees
Interest
Net rent
Operating profits
Credits
Sales to other accounts
Production for own use
Inventory, change
Production subsidies
Consumption (or Appropriation) Account
Debits
Distribution of income
Income payments, including
compensation of employees,
profit and interest payments,
direct taxes and current
transfers out of sector
Consumption expenditures
Savings (or retained earnings)
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Credits
Factor income of sector
Other income received by
sector
Current transfers in
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Capital Reconciliation Account
Debits
Additions to the fixed
capital and inventories
of the sector
Lending to other sectors
Capital transfers out
Debits
Credits
Depreciation allowances
Savings
Borrowing from other
sectors
Capital transfers in
External Account
All credits in accounts
1 through 8 which do not
appear as debits in those
accounts
Credits
All debits in accounts
1 through 8 which do not
appear as credits in
those accounts
The formal duality (or double entry) restraint imposed on
the preceding set of accounts may be relaxed and an alternate set of
accounts introduced. The formal duality constraint imposed above
requires that every debit entry for a given sector be matched by a
credit entry in some account of the same sector. As an alternative
the following restriction may be introduced: every credit entry must
appear as a debit entry in some other account of the system. In this
manner, the formal duality constraint is relaxed and a debit appearing
in the household set of accounts need not reappear as a credit in that
set but may reappear as a credit in, say, the government set of accounts.
It is clear that. in this alternate set of accounts there is no longer
a requirement for the fourth, or external, account. On the other hand,
it is necessary, if the economy trades outside its boundaries, to add
a fourth, or foreign trade, sector. Through this sector it is possible
to account for transactions which take place with persons and institu-
tions outside the economy.
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