THE SOVIET BUDGET FOR 1962

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A002500110002-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 32
• Document Creation Date: December 23, 2016
• Document Release Date: June 5, 2013
• Sequence Number: 2
• Publication Date: November 1, 1962
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
! N? 110
STAT
THE SOVIET BUDGET FOR 1962
NOT TO BE REPRODUCED IN WHOLE OR
IN PART WITHOUT THE PERMISSION OF
THE CENTRAL INTELLIGENCE AGENCY
CENTRAL INTELLIGENCE AGENCY
I
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05:
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
This report has been loaned to the recipient
by the Central Intelligence Agency. When it
has served its purpose it should be destroyed
or returned to the:
CIA Librarian
Central Intelligence Agency
Washington 25, D. C.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79R01141 A002500110002-9
THE SOVIET BUDGET FOR 1962
CIA/RR ER 62-34
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79R01141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
FOREWORD
The Soviet planned budget for 1962 was presented to the Supreme
Soviet of the USSR on 6 December 1961 and was duly made into law after
the usual minor adjustments. This report covers the planned budget for
1962 and such data on the fulfillment of the 1961 budget as has so far
been made public. The major tables in this report contain the basic
data on the Soviet state budgets since 1957?
STAT
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
CONTENTS
Page
Summary and Conclusions . . . . . . . . . . . . . . . . . . . 1
I. Availability of Data . . . . . . . . . . . . . . . . . . .
II. Expenditures . . . . . . . . . . . . . . . . . . . . . . .
A. Financing the National Economy . . . . . . . . . . . . 4
1. Capital Investment . . . . . . . . . . . . . . . .
2. Working Capital . . . . . . . . . . . . . . . . .
3. Agriculture . . . . . . . . . . . . . . . . . . .
B. Social-Cultural Measures . . . . . . . . . . . . . . . 9
C. Administration . . . . . . . . . . . . . . . . . . . 12
D. Defense . . . . . . . . . . . . . . . . . . . . . . . 12
E. Other Expenditures . . . . . . . . . . . . . . . . . . 13
1. Reserve Funds of the Councils of Ministers . . . . 13
2. Loan Service . . . . . . . . . . . . . . . . . . . 14
3. Budgetary Expenditure Residual . . . . . . . . . . 14
A. Turnover Tax . . . . . . . . . . . . . . . . . . . . . 15
B. Deductions from Profits . . . . . . . . . . . . . .. . 16
C. Income and Other Taxes on Organizations . . . . . . . 16
D. Social Insurance Receipts. . . . . . . . . . . . . . . 16
E. Budgetary Revenue Residual . . . . . . . . . . . . . . 16
F. Revenue from the Private Sector . . . . . . . . . . . 18
1. State Taxes on the Population . . . . . . . . . . 18
2. State Loans . . . . . . . . . . . . . . . . . . . 18
3. Local Taxes and Collections . . . . . . . . . . . 19
Appendixes
Appendix A. Residuals in the Soviet Budget . . . . . . . . . 23
Appendix B. Budgets of the Union-Republics of the USSR . . . 25
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
Page
STAT
Tables
1. Plan for Financing the National Economy in the USSR, by
Economic Sector, 1960-62 . . . . . . . . . . . . . . . .
5
2. Capital Investment and Planned Sources of Financing in the
USSR, 1958-62 . . . . . . . . . . . . . . . . . . . . .
6
3. Owned Working Capital Norms of State Enterprises in the
USSR, 1 January 1960 - 1 January 1963 . . . . . . . . .
8
4. Planned Allocations to State Agriculture in the USSR,
1958-62 . . . . . . . . . . . . . . . . . . . . . . . .
10
5. State Budget Expenditures for Social-Cultural Measures in
the USSR, 1959-62 . . . . . . . . . . . . . . . . . . .
11
6. Relation Between the Soviet Turnover Tax and Retail Trade,
1958-62 . . . . . . . . . . . . . . . . . . . . . . . .
15
7. Profits of State Enterprises and Organizations in the USSR,
1958-62 . . . . . . . . . . . . . . . . . . . . . . . .
17
8. Expenditures of the State Budget in the USSR, 1957-62 . .
20
9. Revenues of the State Budget in the USSR, 1957-62 . . . .
21
10. Residuals in the State Budget of the USSR, 1955-62 . . .
24
11. State Budgets of the Union-Republics of the USSR, 1961 and
1962 Plans . . . . . . . . . . . . . . . . . . . . . . .
26
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
THE SOVIET BUDGET FOR 1962
Summary and Conclusions
The state budget of the USSR for 1962 contains small increases
above that for 1961 in total revenues and expenditures, but the stated
appropriation for defense expenditure has increased to 13.4 billion
rubles,* 45 percent greater than the corresponding appropriation for
1961 and about 8 percent above the revised total of 12.4 billion rubles
for 1961 as announced by Khrushchev in July of that year. An analysis
of the budget figures suggests that most of the increase in the explicit
Defense appropriation may have been merely a transfer to the explicit
Defense budget of expenditures previously charged elsewhere. The only
explicit real offset to the large planned increase in the Defense budget
is the very small rise in budget funds for capital investment. This
appropriation rises from 19.5 billion rubles in 1961 to 19.7 billion
rubles in 1962 compared with increases of 1.5 billion rubles in previous
years.
Total revenues are planned at 81.9 billion rubles as against 79.0
billion in the 1961 Plan, and total expenditures at 80.4 billion rubles
as against 77.6 billion in 1961.
Although retail trade is planned to be up 6 to 7 percent, receipts
from the turnover tax are planned to be unchanged at 32.5 billion rubles,
reflecting a somewhat lower average rate of the turnover tax. Budgetary
receipts from profits are planned at 23.2 billion rubles as against 20.5
billion planned for 1961.
The total plan for Financing the National Economy increases only
from 56.4 billion rubles for 1961 to 56.5 billion rubles for 1962, with
the budgetary contribution to the plan dropping from 33.9 billion rubles
to 32.5 billion. In fact, this drop may not reflect a decrease in the
contribution of the budget to the economy. It would appear to reflect a
transfer to the explicit Defense budget of certain specific expenditures
* Ruble values in this report are given in new rubles established by
the Soviet currency reform of 1 January 1961. A nominal rate of ex-
change based upon the gold content of the respective currencies is 0.90
ruble to US $1. This rate, however, should not be interpreted as an
estimate of the equivalent dollar value of similar US goods or services.
Unless otherwise indicated, ruble values in this report are in current
rubles.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
previously charged to the residual in Financing the National Economy
(referred to as the FNE Residual).*
Planned expenditures for the category Social-Cultural Measures in-
crease from 27.1 billion rubles for 1961 to 28.7 billion rubles for 1962.
Within this category the budgetary allocation** for education, training
of cadres, science, and culture increases by 9.7 percent to 12.4 billion
rubles for 1962. The budgetary allocation for science alone for 1962 is
set at 4.3 billion rubles, an increase of 1.1 billion rubles above the
1961 Plan.
The striking feature with regard to the budgetary information fur-
nished this year is the small amount of information as regards actual
fulfillment of the 1961 budget. On the expenditure side it is possible
from the information that is given to calculate that, in 1961, actual ex-
penditures under the explicit Defense budget were expected to be 11.9
billion rubles, but no other expenditure figures are given other than a
total of 76.7 billion rubles.. Total actual receipts were expected to be
78.3 billion rubles, which would be 0.7 billion rubles less than plan.
The absence of actual expenditure figures for the category Financing
the National Economy or its components precludes any analysis of eco-
nomic trends in 1961 from the published budget.
For a discussion of residuals in the Soviet budget, see Appendix A.
The term allocation in this report is used consistently as an equiv-
alent of planned expenditure.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
I. Availability of Data
The published sources of information on the Soviet budget for 1962
are the speeches by Finance Minister Garbuzov and others to the Supreme
Soviet on 6 December 1961 and articles published early in 1962 in of-
ficial periodicals of the state planning and finance organs. / * The
outstanding feature of this material is the paucity of information given
as to fulfillment figures for 1961. In contrast to previous years, the
articles in the finance periodicals added almost no information to that
given in the speeches to the Supreme Soviet.
There has been only one minor public disclosure of data beyond the
budget speeches. The fulfillment figures for 1960; as given in the
budget speech in December 1960, failed for some reason to include expen-
ditures financed from the Reserve Funds of the Council of Ministers.
The final figures given in the 1960 statistical handbook, however, gave
corrected expenditures that included use of the Reserve Funds (see
Table 8**).
II. Expenditures
The over-all picture in regard to expenditures in the Soviet state
budget may be seen in Table 8. Expenditures are planned to increase
2.8 billion rubles as against an increase in over-all planned receipts
of 2.9 billion rubles. Announced increases in the budgetary allocations
for Agriculture (0.9 billion rubles), for the Municipal Economy (0.2
billion rubles), and-for Social-Cultural Measures (1.6 billion rubles)
almost exhaust all of this increment.
If announced increments in several expenditure categories nearly
exhaust the total increase in over-all expenditures (1962 Plan above the
1961 Plan), the interesting query arises as to what the sources are for
the increases in the explicit Defense budget of 4.1 billion rubles_(1962
Plan over what was originally planned for 1961). The declines that
balance the increases in Defense appear in the allocation to Industry
and Construction, in the residual of Financing the National Economy,
and in the over-all Budgetary Expenditure Residual (see Table 8). To
what extent these declines may be "real" rather than shifts of defense
activities previously hidden in these categories is discussed in A and
D, below.
P. 20, below.
These absolute increases are for the 1962 Plan compared with the
1961 Plan. As indicated above, published data for actual expenditures
in 1961 to date are almost nil.
STAT.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
A. Financing the National Economy*
Comparative figures for the 3 years 1960, 1961, and 1962 for
the full Plan for Financing the National Economy are given in Table 1.**
The striking feature of the figures for 1962 is the drop in the budget-
ary allocation to Industry and Construction from 16.1 billion rubles in
1961 to 14.8 billion rubles in 1962. The changes in allocations to
other sectors appear to be consistent with known developments in these
sectors. The allocations to Agriculture (and Forestry) continue to in-
crease, and, compared with 1960, there is some increase in the total
allocation to Transportation and Communications.
The drop shown in the explicit budget allocation to Industry
and Construction appears to represent decreases in both investment and
noninvestment allocations. As can be seen from Table 2,*** there was
no drop in the budgetary allocation to investment as a total. In fact,
the budgetary allocation to investment increased from 19.5 billion to
19.7 billion rubles. With the total budgetary allocation to Agricul-
ture up this year by only 0.9 billion rubles,} the investment portion
of that allocation increase probably was not more than 0.6 billion
rubles. J From data published for previous years, J an investment
portion of not more than 0.2 billion is suggested by the increase for
Social-Cultural Measures of 1.6 billion rubles (see Table 8). Allow-
ing for an increase of 0.2 billion rubles in the budgetary allocation
for investment for Trade, the increased budgetary allocation to invest-
ment other than Industry would not have been more than 1.0 billion
rubles, which would mean that the budgetary contribution to investment
in Industry and Construction would be down by about, and certainly not
more than, 0.8 billion rubles (in that the total budgetary contribution
to investment increased by 0.2 billion rubles). Funds for investment
from sources other than the budget are to increase by 1.3 billion rubles
(see Table 2), some of which certainly must represent funds for Industry.
Thus it would appear that any burden intended to be borne by
Industry (and Construction) as a result of the increased military
spending planned for 1962 is planned to take the form not of any de-
crease in the total of the funds that will be spent on Industry but
rather in the spending on Industry in 1962 of little more than was
planned to be spent in 1961.
* For a separate discussion of the Residual under Financing the Na-
tional Economy, see Appendix A.
Table 1 follows on p. 5.
** Table 2 follows on p. 6.
t See 3, p. 9, below.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
Plan for Financing the National Economy in the USSR, by Economic Sector a/
1960-62
1960 Plan
1961 Plan
1962 Plan
Enterprise
Enterprise
Enterprise
Own
Own
Own
t
B
d
Funds /
Total
Budget
Funds
Total
Budget
Funds S
Total
Economic Sector
ge
u
Industry
and Construction
15.19
12.74
27.93
16.1
(14.7) /
(30.8)
14.8
15.7
30.5
Agriculture
and Forestry
3.23
1.83
5.06
4.2
2.0
6.2
5.1
2.5
7.6
Transportation
and Communications
2.54
3.19
5.73
(2.5)
N.A.
N.A.
2.5
3.8
6.3
Trade
(Domestic and Foreign)
(0.25)
(0.53)
(0.78)
(0.4)
N.A.
N.A.
1.7
1.0
2.7
Agricultural Procurement
(0.90)
N.A.
N.A.
(1.0)
N.A.
N.A.
4
1
Municipal Economy
2.86
N.A.
N.A.
3.6
N.A.
N.A.
3.8
0.3
8
.
Residual
(5.93)
(1.18)
(7.11)
(6.1)
N.A.
N.A.
4.5 e
0.
5.3
30.90 19.47 50.37 33.9 22.5 56.4 2 ~? 24.1 56.5
a. /
b. The adjusted plan (see Table 8, p. 20, below).
c. Enterprise own funds (sobstvennyye sredstva predpriyatiya) consist mainly of profits, amortization allow-
ances, and allowances for above-plan reductions in investment costs resulting from increased efficiency.
d. Figures in parentheses are estimates.
e. Differences from figures in Tables 8 and 10 are due to different rounding in the original source.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
Capital Investment and Planned Sources of Financing in the USSR
1958-62
1958 1959
1960 /
1961 b/
1962 J
Volume (centralized) (in
"estimate" prices)
Total (plan)
19.88
22.60
25.55
29.04
30.6
Total (actual)
19.91
22.04
25.7
27.7
N.A.
Planned financing
(
centralized) (in
c
urrent rubles)
Total (plan)
20.38
23.31
26.24
29.5
31.0
Planned sources
Budget
Profit
14.27
2.51
16.37
2.94
18.06
3.43
19.5
4.2
19.7
4.4
Amortization
2.77
3.25
3.61
4.1
4.6
Other
0.83
0.75
1.14
1.7
2.3
Decentralized (actual) (in
"estimate" prices) d/
4.04
4.76
5.1
4.8
N.A.
a.
b. Beginning with 1960, figures for centralized investment include
outlays for project planning. Such outlays in 1960 amounted to 0.7
billion rubles.
c. Volume of construction, both planned and completed, is quoted in
terms of "estimate prices," which are prices of 1 July 1955 with
certain subsequent adjustments. The relationship of these estimate
prices to current prices is reflected roughly by the relationship of
the planned volume of investment, expressed in estimate prices, to
the planned financing (including increased working capital for the
construction organizations) for the same year, expressed in current
rubles.
d. Excluding collective farm investment.
-6
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
As stated earlier, information as to expected actual expendi-
tures* in 1961 for Financing the National Economy is lacking.
The single figures given for the proposed 1962 expenditure for
Trade and Procurement, taken together, constitute the first published
information we have had on these sectors for some years (see Table .
The new figure as given does not appear to constitute any reason for
changing the estimate of 0.25 billion rubles that was made for the
budgetary contribution to Trade in 1960. Some increase in the expen-
diture for Trade could be expected in the light of recent increase in
the building of retail outlets. As regards Procurement, it was an-
nounced last December in Pravda that, under procurement, the state has
taken on a new expense of 0.17 billion rubles to cover costs of trans-
porting collective farm produce to the state procurement points.
Developments over the last several years in expenditure for the
Municipal Economy * are shown in Table 8.**
1. Capital Investment
Data on planned (centralized) capital investment, reported
fulfillment, and planned sources of financing, for 1958 through 1962,
are shown in Table 2. Although (centralized) investment is shown as
being planned for 1962 at 31.0 billion rubles, i/ or 1.5 billion rubles
greater than planned for 1961, it will be noted that the budget alloca-
tion to investment in 1962 is being increased by only 0.2 billion rubles.
This is the one place in the budget figures where the increase in the
explicit Defense allocation (1962 Plan in comparison with the 1961 Plan)
appears to be reflected in a reduced growth of other explicit expendi-
tures.
2. Working Capital
The working capital norms of Soviet enterprises represent,
for each enterprise, that enterprise's owned working capital in contrast
to its borrowed working capital. These owned funds are supplemented
regularly by borrowing on short term from the State Bank. On total the
amount of borrowed working capital approximates, and recently has
slightly exceeded, owned working capital. The development of the owned
working capital norms over the past 4+ years is shown in Table 3.t
* Figures for expenditures in 1961, made public in December of 1961
in connection with the announcement of the budget for 1962, are of ne-
cessity figures for expected expenditures in 1961.
The literal translation of the Russian title for this segment of
expenditure is the "Communal and Housing Economy."
P. 20, below.
t Table 3 follows on p. 8.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
Table 3
Owned Working Capital Norms of State Enterprises in the USSR
1 January 1960 - 1 January 1963
1 January 1960
1 January 1961
1 January 1962
1 January 1963
Plan Actual
Plan
Actual
Plan
Actual
Pl
an
Industry and Construction
20.07 20.48
22.26
23.0
24.9
24.6
26.0
Agriculture
3.74 3.85
4.30
4.5
5.2
4
6
7
5
Transportation
Communications
and
1.37
1.46
1.57
1.6
1.7
.
1.7
.
1.8
Domestic Trade
3
33
3
53
3
77
4
0
4
4
4
.
.
.
.
.
.4
4.7
Agricultural Procurement)
2.06
2
33
2
54
3
5
1.1
1.2
Other
.
.
.
3.7
1.9
2.0
30.57
31.65
34.44
36.6
39.9
40.1
43
2
.
Planned increase in
working capital norms
To be contributed from
the budget
0.73
1.1
To come from earnings of
the enterprise
2.06
2.2
2.79
3.3
a
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
3. Agriculture
Allocations to state agriculture* have risen sharply (see
Table 4**). The budget allocation to agriculture this year is 5.1 bil-
lion rubles compared with 4.2 billion rubles in 1961, and contributions
from enterprise own funds*** will be 2.5 billion rubles as against 2.0
billion rubles last year.t The total allocation to state farms this
year, both from the budget and from own funds, is 5.011 billion rubles
as against 4.1 billion rubles last year, reflecting in part the increase
in the number of state farms resulting from the transformation of col-
lective farms to state farms.
Centralized capital investment in agriculture for 1962 was
first planned at 3.139 billion rubles. Later this figure was increased
by 0.210 billion rubles (see Table 4, footnote b).
In the original plan and budget speeches, there was no announce-
ment of planned capital investment on the collective farms. An official
statement in mid-March that total investment in agriculture will be
nearly 8 billion rubles suggests investment by collective farms of about
the amount planned for last year, 4.6 billion rubles.
Expenditures from the budget for Social-Cultural Measures in
1962 are planned to be 28.7 billion rubles. Details of planned expen-
ditures for 1962, in comparison with planned expenditures for earlier
years, are given in Table 5.tt Expenditures for Science continue tottt
* The Soviet term state agriculture in the context of budgetary ex-
penditures includes allocations to state farms, repair technical sta-
tions, and general agricultural programs such as irrigation, experimen-
tal stations, afforestation, and the like, but it excludes the collec-
tive farms.
Table 4 follows on p. 10.
Enterprise own funds (sobstvennyye sredstva predpriyatiya) consist
mainly of profits, amortization allowances, and allowances for above-
plan reductions in investment costs resulting from increased efficiency.
t The increases in meat and butter prices announced in July 1962
probably will permit increased expenditures by state farms of own funds
above original plans.
tt Table 5 follows on p. 11.
ttt Text continued on p. 11.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
Planned Allocations to State Agriculture in the USSR a/
1958-62
Billion Current Rubles
1958
1959
1960
1961
1962
Total financing
6.52
x+.50
5.06
6.2
7.6
Budget funds
x 34
3 0
3.23
4+.2
5.1
State farms
1.19
1.4o
1.90
2.7
(3.5) C/
MTS-RTS's /
2.96
0.37
0.29 /
N.A.
N.A.
Other
1.19
1.26
1.04
N.A.
N.A.
Enterprise own funds
1.18
1.47
1.83
2.0
2.5
Of which:
State farms
Total centralized
N.A.
N.A.
N.A.
1.4
(1.5) c/
investment
2.97
1.91
1.90 fl
2.3
3.1 b/
Budget funds
2.59
1.52
N.A.
N.A.
N.A.
Own funds
0.38
0.39
N.A.
N.A.
N.A.
a. 2/. For a definition of the Soviet term state agriculture, see the
first footnote on p. 9, above.
b. Original plan. Inasmuch as the original plan for centralized capital
investment in agriculture in 1962, in the amount of 3.139 billion rubles,
was later increased by 0.210 billion rubles, 10 it is to be presumed that
the total plan was increased at the same time by an equal amount.
c. Total allocation to state farms was 5.011 billion rubles. The distribu-
tion between the planned contributions to this amount from budget funds and
from own funds has been estimated on the basis of the shares in previous
years.
d. Machine tractor stations (MTS's) in 1958, repair technical stations
(RTS's) thereafter.
e. This figure may include a small amount of enterprise own funds in
addition to budget funds.
f. Calculated figure.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
State Budget Expenditures for Social-Cultural Measures in the USSR
1959-62
1959 1960 1961 1962
Actual
Plan
Actual
Plan
Actual
Plan
Total for Social-Cultural
Measures
23.12
24.74
24.93
27.1
N.A.
28.7
Education
9.41
10.20
10.32
11.3
N.A.
12.4
General Education
4.43
(4.50) b/
5.00
5.3
N.A.
(5.3)
Training of Cadres
2.39
2.21
2.42
2.2
N.A.
(2.2)
Science c/
2.00
(2.84)
2.34
(3.2)
(3.8)
4.3
Other
0.59
(o.65)
0.56
(o.6)
N.A.
(0.6)
Health and Physical
C
ulture
4.47
4.75
4.82
5.2
N.A.
55+0
So
cial Welfare
9.24
9.79
9.79
100.
N.A.
11.3
Social Security
2.67
2.30
2.81
N.A.
N.A.
N.A.
Social Insurance
6.07
7.02
6.48
7.8
(7.9)
8.4
Aid to Mothers
0.50
0.47
0.50
N.A.
N.A.
N.A.
a. 11
b. Figures in parentheses are estimates.
c. In addition to these expenditures financed from the budget, other
expenditures for Science are financed from enterprise own funds.
rise rapidly.* As against planned budgetary expenditures for Science in
1961 of 3.2 billion rubles, actual budgetary expenditures were 3.8 billion
rubles, and planned budgetary expenditures for 1962 are 4.3 billion rubles.
* The full Soviet term for the budgetary expenditure category Science is
"Expenditures for Scientific-Research Establishments." These "scientific-
research establishments" include the Academy of Sciences of the USSR and
its branches and affiliated subordinate institutes and, in addition, cer-
tain other scientific-research establishments more directly connected with
production. L2/
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
Over and above state budgetary expenditures for Science, there are the
expenditures referred to as financed from enterprise own funds, which
may represent the expenditures for research covered by being included
in the costs of production. Total planned expenditures for Science
from all sources for 1961 were evidently 3.8 billion rubles; total ac-
tual expenditures in 1960 were 3.26 billion rubles.*
C. Administration
Outlays for Administration continue to decline. Planned out-
lays for 1962 are 1.07 billion rubles as against a planned outlay of
1.09 billion rubles for 1961** (see Table 8**-*).
The explicit Defense budget for 1961 was set originally at
9.255 billion rubles, slightly under that of the previous year (see
Table 8), in apparent conformity with the announced plan for the con-
tinuing reduction of the number of effectives in the armed forces.
Khrushchev, in his speech of 8 July 1961, announced a halting of the
reduction in armed forces and an increase in such allocations to 12.4
billion rubles, 15/ an apparent increment of more than 3.1 billion
rubles. In connection with the announcement of the Defense budget for
1962, set at 13.4 billion rubles, the statement was made that this pro-
posed expenditure for 1962 was "higher by 13 percent than 1961," from
which an expenditure for 1961, in the amount of 11.9 billion rubles,
can be calculated. 16
The discontinuation of demobilization would result in overplan
manpower costs, but the evidence from the budget suggests (see Table 8)
that any increase above the original in actual expenditures for 1961
for Defense must have been moderate. Total actual expenditures, for
the budget as a whole, were less than plan. The underfulfillment in
state centralized investments appears to be the probable cause of the
shortfall of 0.9 billion rubles in total expenditures compared with the
original plan. There is no apparent indication of significant decreases
in other budget expenditure categories below the original plan. As in-
dicated above, it is suspected that budget categories other than the
item labeled explicitly Defense contain planned expenditures normally
characterized as defense. It can be conjectured that the major part of
* An official reference 13 that quotes these larger magnitudes is
presumed to give the total expenditures financed from both budgetary
and nonbudgetary funds.
** Expenditures for Administration in the Soviet state budget consist
of expenditures for the maintenance of the central and local organs of
state power, the state administration, the state courts, and the state
procuracy. 14/
*** P. 20, below.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
the apparent above-plan (original 1961 Plan) fulfillment for 1961 was
the result of "surfacing" of defense-related expenditures from these
other elements.
It is further suggested that this type of transfer (defense ex-
penditures from nondefense categories to the explicit Defense category)
continued into the planned budget for 1962. The increase in the ex-
plicit Defense budget for 1962 (Plan) compared with 1961 (Original Plan)
of 4.1 billion rubles is completely offset by the following decreases:
(1) 1.3 billion rubles in the explicit allocation for Industry and Con-
struction, (2) 1.5 billion rubles in the residual in the category
Financing the National Economy, and (3) about 1.5 billion rubles in the
unspecified budget expenditure remainder. It is suggested that most
of these decreases represent transfers of expenditure categories to the
explicit Defense budget rather than real decreases in planned nondefense
spending.
Although the above remains highly conjectural, it is believed
that, given the lack of alternative explanations as to why certain
trends in these other categories (two residual, one explicit) are noted,
there is a basis for assuming that the transfer of some of the "hidden"
defense expenditures is responsible. These unexplained residuals of
expenditure, as well as the budgetary revenue residual, are considered
in detail in Appendix A.
The only area in the budget where planned expenditures seem to
have been cut back from what they would have been otherwise appears to
be in the proposed budgetary financing of new capital investment. As
can be seen by reference to Table 2,* whereas the budgetary contribution
to new capital investment in 1961 was set at 19.5 billion rubles, the
corresponding figure for 1962 is only 19.7 billion rubles. The increase
of 0.2 billion may be compared with annual increases of about 1.5 bil-
lion rubles in previous years.
In considering these possibilities, it must be remembered that
these comparisons are between plans. The 1961 pattern of actual ex-
penditures, and in particular the actual disposition of theme-bil-
lion rubles in the Reserve Funds of the Councils of Ministers (see E,
1, below) for 1961, were not published.
E. Other Expenditures
1. Reserve Funds of the Councils of Ministers
Reserve Funds, for expenditure by the Council of Ministers
of the USSR and by the Councils of Ministers of the union-republics,
P. L, above.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
are set up as such in the planned budgets. Expenditures of these funds,
however, are shown in the reports of budgetary expenditures under the
expense category where the expenditure was made. For the years 1957,
1958, and 1959 the reports of actual expenditures indicated that these
reserve funds had been used, in major part, to finance expenditures
under Financing the National Economy. For some reason the preliminary
fulfillment figures for 1960, as given in the end-of-year budget speech
in December 1960, failed to include in the amount given for expenditures
under Financing the National Economy such expenditures as were financed
from these reserve funds. Final fulfillment figures for 1960 given in
the 1960 handbook apparently did include them. Final fulfillment fig-
ures for the budget as a whole show total expenditures to have been 0.75
billion rubles more than the announced preliminary figures (see Table 8*).
If it is assumed that these expenditures were charged to the FNE Residual
(an assumption that is warranted by what we know of the account), there
would be left in the increase in the difference between the preliminary
and final FNE total a sum of 2.35 billion rubles** to be imputed to the
Industry and Construction component of FNE as the additional expenditures
charged to that account financed from the original reserves figure of
2.76 billion rubles (see Table 8).
As can be seen from Table 8, the actual disposition of Re-
serve Funds in 1961 and the amount of Reserve Funds set aside for 1962
cannot be determined from the information as published.
2. Loan Service
Table 8 shows that no data on this account have been given
later than the fulfillment figure for 1960, which was 0.7 billion rubles.
3. Budgetary Expenditure Residualt
The remainder of the expenditures in the general expenditure
budget, a category designated as the Budgetary Expenditure Residual,
have been relatively stable in recent years until 1962tt (see Table 8).
This residual is believed to include outlays for internal security
(such as expenditures of the republic Ministries of Internal Affairs
and of the Committee or Committees for State Security), and it probably
includes budgetary appropriations to increase the funds available for
x P. 20, below.
34.1 less 31.0 equals 3.1, which, less 0.75, equals 2.35.
The expenditure category Loan Service, covering principal retire-
ment and interest payments on the state loan, has constituted a minor
sum since 1957, when a moratorium on the public-held state loan was de-
clared.
t For further discussion of this residual, see Appendix A.
tt For an explanation of the unusual amount of this residual in the
preliminary actual figures for 1960, see 1, p. 13, above.
- 14 -
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
long-term lending. 17 Appropriations for this latter purpose in 1957
were 0.46 billion rubles, in 1958 0.30 billion rubles. 18 As the
total of this account at all times far exceeds these known elements,
this is one of the accounts that must be considered as probably con-
taining some portion of the expenditures for defense purposes outside
of the explicit Defense budget.
III. Revenues
The general trend in the Soviet state budgetary revenues is shown
in Table 9.*
A. Turnover Tax
The turnover tax, effectively an excise tax levied on consump-
tion.goods, represents the largest single revenue item in the budget.
Table 6 shows the trend in this tax over recent years: the base of the
tax has been increasing and the rate of tax declining. In 1962 the
total amount of the tax to be collected is 32.5 billion rubles, the
same amount as planned for 1961.
Relation Between the Soviet Turnover Tax and Retail Trade
1958-62
Billion Current Rubles
Year
Turnover Tax
Retail Trade 12/
Turnover Tax
as a Percent
of Retail Trade
1958 (actual)
30.45
66.85
45.5
1959 (actual)
31.07
70.95
43.8
1960 (actual)
31.3
77.80
4
0.2
1961 (actual)
31.2 /
80.2
38.9
1962 (plan)
32.5
86
37.8
a. See Table 9, p. 21, below.
b-. 19 Excluding the commission sales of consumer cooperatives, which
do not carry turnover tax.
c. Calculated.
d. Preliminary.
P. 21, below.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
B. Deductions from Profits
All of the profits from state enterprises are disposed of in
accordance with instructions laid down by the state. In 1962 the state
will take directly for the budget a little more than two-thirds of the
profits that are planned. The larger part of above-plan profits is
left with the enterprises. Profits paid to the budget are called "prof-
it deductions." Profits left with the enterprises, with the exception
of amounts used to repay modernization loans and to finance various
types of bonuses, are used, together with accumulations of amortization
funds not used for capital repair, for capital investment and other
planned expenditures. The trend of profits in recent years can be seen
from Table 7.*
The large increase in planned profits for 1960 in comparison
with that for 1959 reflects the transfer into state enterprises of the
producer cooperatives and the fact that this transfer, effected during
1960, was already planned at the time of the announcement of the 1960
plan figures.
Profits planned. for 1962 do not take into consideration the
forthcoming planned industrial price changes, because these changes are
planned to be put into effect at the end of 1962.
C. Income and Other Taxes on Organizations
As can be seen from Table 9,** tax receipts in this sector have
been declining. Taxes in this sector include entertainment taxes and
income taxes from consumer cooperatives, social organizations, and col-
lective farms.
D. Social Insurance Receipts
Social Insurance Receipts consist of payments to the budget by
state enterprises of a fixed percentage of their wage bill. Receipts
for 1962 are planned at 4.5 billion rubles (see Table 9).
E. Budgetary Revenue Residual***
Inasmuch as all the segments of revenue from the private sector
can be identified, the Budgetary Revenue Residual is the residual in
the revenue from the social sector. Information on what is included in
this residual is published only on a very scattered basis.
* Table 7 follows on p. 17.
** P. 21, below.
*** For further discussion of this residual, see Appendix A.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
Profits of State Enterprises and Organizations in the USSR J
1958-62
Confirmed Preliminary Confirmed Preliminary Adjusted
Plan Actual Plan Actual Plan Plan b
Preliminary
Actual
Actual
Confirmed
Plan
Preliminary
Actual
Confirmed
Plan
Total 18.84 19.64 21.95 23.24 28.53 26.48 ,
(27.8)
(27.0)
30.2
22.3
32.
To budget / 12.86 15.25 20.07 (18.02)
18.7
(18.3)
(20.2)
20.8
22.8
Retained 5.98 6.70 8.46 8.46
(9.1)
(8.7)
(lo.o)
8.5
10.1
Of which:
Industry and
Construction 11.16 (11.76) 13.25 14.33 18.27 18.27
(1)
18.5
20.9
To budget 7.13 8.6o 12.48 12.48
14.1
Retained 4.03 4.65 5.79 5.79
6.8
a-.2D,
b. Adjusted, to make comparable with subsequent data, by elimination of profit on imports (see Table 8, footnote g, p. 20, below).
c. Figures in parentheses are calculated or estimated.
d. Less than the total amount to be carried to the budget, by amounts expected to be collected as a result of recalculations of amounts due
to the budget on profits earned in previous years. For amounts planned to be carried to the budget, see Table 9, p. 21, below.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
Besides the income from forestry operations, which was planned
for 1958 at 0.21 billion rubles, this residual includes unclaimed bal-
ances transferred to the state by Soviet enterprises and sums received
from the sale of state property. It is believed that this residual re-
ceives the proceeds of the sale of gold from the State Material Reserves
and any repayments of foreign loans.
The trend in this residual can be seen by reference to Table 9.*
Table 10** shows that increases for the years 1959, 1960, and 1961 ap-
pear to have been matched rather closely by corresponding increases in
the unidentified residual in Financing the National Economy.
1. State Taxes on the Population
In October 1960 a plan was initiated in the USSR for the
elimination by October 1966 of special personal taxes and all income
taxes-on the population. As a result of the tax reductions put into
effect under this plan, planned revenues for 1961 from state taxes on
the population were less than revenues planned and received for 1960.
This plan continues to be put into effect by "stages." For example,
initially there was an elimination on 1 October 1960 of the bachelor
tax and all income tax on salaries up to 50 rubles per month and a re-
duction of the tax on incomes between 51 and 60 rubles per month. On
1 October 1961 the remainder of the tax on salaries from 51 to 60 rubles
per month was eliminated, and a reduction of the tax on salaries from
61 to 70 rubles per month was initiated. On 1 October 1962 the elimi-
nation of tax and the reduction of tax will be moved up another step.
Nevertheless, for 1962 the general increase in levels of
personal income, plus the effect of the proposed shift to a new and
higher basis of salaries in the nonproductive sector, apparently will
expand the taxable income of the categories not yet subject to rate re-
vision sufficiently to more than offset the reductions. With an ex-
pected expansion of between 3 and 4 percent in the number of "workers
and employees," the planned revenue in 1962 from state taxes on the
population will be 5.8 billion rubles as against 5.5 billion rubles
planned for 1961 (see Table 9***).
2. State Loans
Savings deposits by the end of 1962 are expected to reach
12.7 billion rubles, 21 an expected increase for the year of 1.0
* P. 21, below.
Appendix A. p. 23, below.
*** P. 21, below.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
billion rubles. 22 This increase will make it possible for the savings
bank system to further increase, by the same amount, its holding of
state loans. Other purchases of state loans for 1962 can be estimated
at 0.1 billion rubles (see Table 9).
3. Local Taxes and Collections
Local taxes and collections include the construction tax,
land rents, various fees from the collective farm markets, taxes on the
owners of private transport, and taxes on the ownership of livestock.
The revenue from local taxes and collections goes in full to the budget
of the locality on the territory of which they are collected. Primarily
they are the taxes of municipalities. 23 The trend in these taxes over
recent years can be seen from Table 9.*
* P. 21, below.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
Expenditures of the State Budget in the USSR
1957-62
1957 J
1958 J
1959 J
d
6
19
0
1961 J
1962 J
-------???-?-
Plan
--.w~??a.y
Actual
uilrmea
Plan
Actual
conrirmed
Plan
Actual
Pl
Confirmed
Adjusted
8/
Preliminary
Final
Confirmed
Preliminary
Confirmed
an
Plan
Plan
Actual
Actual
Plan
Actual
Plan
Financing the National Economy
24.47
26_70
25.72
29.03
89
30
32
37
78
32
32
85
.
.
.
.
(30.90) J
31.0
34.1
33.9
N.A.
32.5
Industry and Construction
Agriculture and Forestry
Transportation and Communications
Trade (Domestic and Foreign)
Agricultural Procurement
Municipal Economy
Unidentified Residual
Social-Cultural Measures
11.84
5.29
1.80
(1.50)
(0.80)
(1.34)
(1.90)
18_84
13.08
5.18
2.26
N.A.
N.A.
N.A.
N.A.
20.05
12.90
5.34
(1.84)
(1.50)
0.86
(1.40)
(1.88)
21.28
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
'N. A.
21.42
14.53
3.03
2.50
(1.80)
(0.90)
(2.80)
(5.33)
23
22
N.A.
N.A.
N.A.
N.A.
Y.A.
N.A.
N.A.
23
12
15.18
3.23
2.54
(2.20)
(0.90)
2.86
(5.87)
24
74
15.19
3.23
2.54
(2.20)
(0.90)
2.86
(5.93)
78
24
(0.25)
15.6
3.3
(2.5)
(0.3)
(0.9)
3.1
(5.3)
4
(17.95)
3.3
(2.5)
(0.3)
(0.9)
3.1
(6.05)
16.1
4.2
(2.5)
(o.4)
(1.0)
3.6
(6.1)
N.A.
N.A.
N.A.
NA.
N..A
N.A.
N.A.
14.8
5.1
2.5
1.7
3.8
4.6
_
_
.
.
.9
2
EL 2
27.1
N. A.
28.7
Education (and Science)
Health and Physical Culture
Social Welfare
Administration
7.89
3.79
7.16
1.19
8.07
3.83
8.15
1.19
8.42
4.04
8.82
1_19
8.60
4.12
8.70
1.20
9.44
4.41
9.37
1.15
9.41
4.47
9.24
1
12
10.20
4.75
9.79
1
11
10.22
4.77
9.79
A
N
10.3
4.8
9.8
10.3
4.8
9.8
11.3
5.2
10.6
N.A.
N.A.
N.A.
12.4
5.0
11.3
.
.
.
.
(1_10)
1.1
1.09
N.A.
1.07
Defense
9.67
(9-50)
6
2~
6
9-36
9.61
937
261
N
A
.
.
? 33
23
1.255
11.9 1/
13.4
Reserve Funds, Councils of Ministers
1.40
0
1.67
0
2
12
0
2
76
N
A
_
.
.
.
0
0
2.80
N.A.
Loan Service
1.80
(0_40)
(0)
0.37
(0.60)
0
69
(0
70)
N
A
.
.
.
.
O
0_7
(0.70)
N.A.
4.73
Budgetary Expenditure Residual
3.09
(2.89)
(2.91)
2.89
(3-17)
3
73
(2
78)
A
N
.
.
.
.
(5_32)
3.0
(2.755)
N.A.
Total expenditures
60.46
60_73
62.77
64.2
70.76 70
40
74
48
4
8
6
.
.
7
.5
(72.
3)
12)
73.1
77.6
76 3 So.4
L 24J
Adjusted, to make comparable with subsequent data, by elimination of profit on imports and subsidy paid on exports (see the treatment of this subject in source 30 ).
Figures in parentheses are estimates.
The figure given in the source has been adjusted, to make the resulting figure comparable with other years.
Calculated on the basis of a statement that the defense budget for 1962, set at 13.4 billion rubles, was "higher by 13 percent than 1961." 31
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
Revenues of the State Budget in the USSR
1957-62
Confirmed
Plan
Preliminary
Actual
Confirmed
Plan
Actual
Confirmed
Plan
Actual
Plan
Confirmed
Plan
Adjusted
Plan 5/
Preliminary
Actual
Final
Actual
Confirmed
Plan
Preliminary
Actual
Confirmed
Plan
Social sector
52.45
(53.77) /
57.03
60.40
65_60
66_60
70.17
68.2
70.1
72.1
71.2
74-5
Turnover Tax
27.73
27.56
30.15
30.45
33.30
31.07
31.71
31.3
31.3
32.5
31.2
32.5
Receipts from Profits
11.60
11.84
13.03
13.54
15.50
15.96
20.30
20.30
(18.25)
19.0
18.6
20.5
21.1
23.2
Revenue from MPS-RTS's J
1.39
1.13
1.19
0.97
0.15
0.18
0
0
0
0
0
0
Other Taxes on Organizations
1.55
1.41
1.56
1.66
1.96
1.90
2.13
(1.8)
1.8
1.6
(1.4)
1.3
Social Insurance Receipts
3.10
3.33
3.33
3.31
(3.50)
3.63
(3.70)
(3.8)
3.8
4.2
(4.2)
4.5
Revenue Residual
7.08
(8.50)
7.77
10.47
(11.19)
13.86
(12.33)
(12.3)
14.6
13.3
(13.3)
1j.0
Private sector
9.27
(8-92)
7.27
6.83
6 73
L41
7 04
(7-15)
L-
0
6.2
7_1
7.4
State Taxes on the Population
5.15
5.20
4.98
5.19
5.61
5.52
5.72
(5.7)
2
-
5.6
5.5
55.5)
5.8
State Loans from Savings Deposits
1.10
1.60
1.30
0.65
0.72
1.33
0.84
(0.85)
0.8
0.9
(1.0
1.0
Other State Loans
2.82
1.92
0.46
0.41
(0.08)
0.16
(0.08)
(0.1)
0.1
0.1
(0.1)
(0.1)
Local Taxes
0.20
(0.20)
0.53
0.58
(0.32)
0.40
(0.40)
(0.5)
0.5
0.4
(0.5)
(0.5)
a? 32
b. 33/
d. 35
e.
f? 37
g. Adjusted, to make comparable with subsequent data, by elimination of profit on imports and subsidy paid on exports (see the treatment of this subject in source 38/).
h. Figures in parentheses are estimates.
i. Machine tractor stations (MIS's) until 1958, repair technical stations (RTS's) thereafter. Revenues after 1958 represent collections by the RTS's of unpaid revenues due to the
MPS's.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
RESIDUALS IN THE SOVIET BUDGET
In the Soviet Budget, three expenditure residuals merit attention:
the final residual, which will be referred to here as the Budgetary
Expenditure Residual; the residual in Financing the National Economy,
referred to as the FNE Residual; and the residual derived by subtrac-
ting from the Industry and Construction component of Financing the Na-
tional Economy the actual or estimated amounts for the major specific
components of that account. These three residuals are derived in
Table 10* for the years since 1955 for which they can be estimated.
Any detailed interpretation of the data presented in Table 10 would
require further study, but certain tentative conclusions may be sug-
gested:
1. During the period 1955-62, there has been a general upward
trend in all three residuals, with certain notable exceptions.
a. The decrease in 1956 in the FNE Residual (actual) compared
with 1955 of 0.89 billion rubles may have been related to the seemingly
abnormal increase of 1.24 billion rubles in the Industry and Construction
residual -- that is, a simple transfer between residuals.
b. An extraordinary increment in 1959 in the FNE Residual
(plan) compared with the plan for the previous year (1.88 billion to
5.33 billion rubles) is not easily explained. It is interesting to
note that this increase of 3.45 billion rubles was matched by a similar
increase in the Revenue Residual (plan) for the same 2 years of 3.42
billion rubles (Table 10, item 4).
2. Another clear turning point was the aggregate decrease in the
1962 Plan compared with the 1961 Plan in the two residuals (Table 10,
items 2 and 3) of 3.1 billion rubles. It is conjectured that this
significant reduction was related to the large supplemental allocations
to the explicit Defense budget announced by Khrushchev in the summer
of 1961 and the continued increase in the explicit Defense budget
planned for 1962 (see Table 8**). In other words, the large reduction
in the plan for these two residuals may have been related to a "sur-
facing" of defense expenditures (explicitly announced) previously in-
cluded in these residuals. No estimate is possible with respect to the
movement since 1960 of the residual in the Industry and Construction
component of Financing the National Economy.
Table 10 follows on p. 24.
P. 20, above.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
Residuals in the State Budget of the USSR
1955-62
1960 1961 1962
Actual Plan Actual Plan Actual Plan Actual Plan Actual Plan Actual .Plan Actual Plan
1. FNE Industry and
Construction a/ 11.02 11.00 12.82 11.84 13.08 12.90 (14.57) J 14.53 (16.01) 15.19 (17.95) 16.1 N.A. 14.8
Less:
Investment c/ 7.28 8.00 (8.52) (9.18)
Increase in working (9.67) (10.40)
capital , (0.39) (0.18) (0.32) (0.31) (0.17) (0.40)
Design Bureaus e/ 0.45 0.50 0.52 0.56 0.60 0
Research and
Development J (0.50) (0.50) (0.40) (0.30) (0.20) 0
Losses paid from
budget (1.06) (1.06) (0.56) (1.20) (1.80) (3.00)
Equals:
FNE Industry and
Construction Residual () (2.58) (2.76) (3_02) (3_57) (4.15) N.A. N.A.
2. FNE Residual 2.53 (1_59) 1.64 (1_9) N.A.
(1.88) N.A. (5.33) N.A. (5.2) (6_05) (6.1) N.A. 4.6
3. Budget Expenditure
Residual h/ 2_50 (2.68) 2.82 3-09 (2.89) (2.91) 2.89 (3_17) 3.73 (2.78) 3.00 (2.755) (1.2)
4. Revenue Residual J 8.59 N.A. 7-39 7_08 (8_50) .77 10.47 (11.19) 13.86 (12.33) 14.6 13.3 (13.3) 13.0
a. 1955, 1956, source 192; 1957 and plans for 1958 through 1962 from Table 8, p. 20, above; actual 1958 and 1959 as estimated in source 0 ; actual 1960 as estimated in II, E, 1, p. 13,
above.
b. Figures in parentheses are estimates.
c. 1955, 1956, source j12; 1957 through 1959 as estimated in source L2/; 1960 estimated on basis of all available data.
d. Estimated as indicated in source L43/.
e. 1955 through 1959 calculated as the difference between capital investment figures including and excluding these costs, figures from source /; as from 1960 these expenditures were no
longer charged to this account, being included in capital investment costs.
f. 1955 through 1959 estimated as indicated in source L52; 1959 confirmed and 1960 estimated by comparing profit figures in Table 7, p. 17, above, with net profit figures given in source
g. Actual 1955 and 1956 from source 47/; plan 1956 as estimated in /; 1957 through 1962 from Table 8, p. 20, above.
h. Actual 1955 and 1956 from source; plan 1956 as estimated in source 50 1957 through 1961 from Table 8,
Councils of Ministers and Loan Services remained unchanged. p. 20, above; plan 1962 estimated on assumption that Reserve Funds of the
i. Actual 1955 and 1956 from source 51 ; 1957 through 1962 from Table 9, p. 21, above.
-24 -
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05: CIA-RDP79RO1141AO02500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
BUDGETS OF THE UNION-REPUBLICS OF THE USSR
Expenditures channeled through republic and local budgets in 1962
(thus appearing in the union-republic state budgets rather than in the
All-Union budget) will total 44.8 billion rubles (see Table 11*) rep-
resenting 55.7 percent of the total expenditures of the consolidated
budget, 80.4 billion rubles (see Table 8**). The share of expenditures
passing through the republic and local budgets has been increasing ever
since 1955, when a large number of industrial, agricultural, construction,
trade, and other organizations were transferred from union control to
republic control. This trend was furthered by the 1957 reorganization,
which put the bulk of industry under the jurisdiction of the councils of
national economy, which in turn are under republic jurisdiction.
The union-republic state budgets for the 1961 plan and for the 1962
plan are shown in Table 11. Union-republic outlays are covered by the
republic retaining certain portions of revenues collected within the
territory of the republic. In general, republics retain all income
from the collective farm income tax, the agricultural tax, forest rev-
enue, and 50 percent of income taxes and state loan revenues. In the
case of profit deductions, enterprises subordinate to republics pay
their profit deductions to the republic, except that 20 percent of the
plan profit of enterprises under the councils of national economy goes
to the All Union budget. The share of the turnover tax retained is
fixed in the yearly plan to permit the republics to cover their expen-
ditures without a surplus. In the 1962 plan, Kazakh SSR and Turkmen
SSR, in addition to receiving 100 percent of the turnover tax collected
on their territory, will receive further subsidies "for the development
of branches of the republic's economy which are of national importance"
of 1,027 million rubles and 62 million rubles, respectively. 52
Expenditures for the union-republic state budgets for Financing the
National Economy in 1961 will be 21.7 billion rubles, to be supplemented
by 19.8 billion rubles from the own resources of the enterprises and
economic organizations of the republics. Expenditures from the union-
republic state budgets for Social-Cultural Measures will be 20.6 billion
rubles. 53
Table 11 follows on p. 26.
P. 20, above.
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
State Budgets of the Union-Republics of the USSR a
1961 and 1962 Plans
1961
1962
Republic
Proposed Plan
RFSFR
25.292
26.363
Ukrainian SSR
7.456
7.598
Belorussian SSR
1.279
1.342
Uzbek SSR
1.145
1.238
Kazakh SSR
3.092
3.375
Georgian SSR
0.718
0.748
Azerbaydzhan SSR
0.669
0.705
Lithuanian SSR
0.545
0.579
Moldavian SSR
0.328
0.351
Latvian SSR
0.474
0.495
Kirgiz SSR
0.395
0.421
Tadzhik SSR
0.331
0.360
Armenian SSR
0.366
0.397
Turkmen SSR
0.362
0.378
Estonian SSR
0.320
0.340
42.772
44.69o
44.8
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
 Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9
Iq
Next 4 Page(s) In Document Denied
STAT
Declassified in Part - Sanitized Copy Approved for Release 2013/06/05 :
CIA-RDP79RO1141 A002500110002-9