Created: 11/1/1960

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CENTRAL INTELLIGENCE AGENCY Office of Research and Reports


0 Soviet budget was presented to the Supreme Soviet of the USSH on9 and was duly made into law after the usual minor adjustments had been made. Presentation of0 budget to the legislature at such an unusually early date may indicate some success in recent campaigns to perfect financial procedures. The Soviet budget normally haa been approved in the spring, well after the Soviet fiscal year, which coincides with the calendar year, is underway. Tbe budgets69 were presented ln late December, Just before the beginning of the Soviet fiscal year.

This report attempts to trace in brief outline the oa^orof tbe Soviet state budget and the main trends in Soviet budgets and budgetary procedures Particular emphasis has been placed on the0 budget. etailed study of the early evolution of the Soviet budget system,. Davies, The Development of the Soviet Budgetary System, Cumbridgc, Cambridge University



Summary and

I. Introduction: What the Soviet State Budget Means

of the

of the Soviet

Budgetource of Economic Information .


A. Financing the National Economy

General Remarks

Allocations by

Shifts and the Category Other


by End

a. General

d Investment and Capital

Differential Grants


Material Reserves

and Other Outlays

Soviet Budget and the Distribution



C. Social-Cultural



2. Health and Social

D. Administration end




Revenue from the Population

Taxes on the


Insurance Receipts

Taxes on Enterprises and Organizations

C. Budget


Appendix A. Budgets of the Union-Republics of the USSR .

Appendix B. Statistical

Appendix C. Source References


the National Economy in the USSR by Budget

Funds, by Economic

for Financing the National Economy in ths USSR

by Enterprise Ovn Funds, by Economic Sector,

to State Agriculture in the USSR, Selected

_ vi -


k. Soviot Collective Faro Incoae, Taxes, and Deduction

to the Indivisible

Outlays for Financing tbe Rational Economy ia

the USSR, by End6 Actual0 Plan .

Investment and Planned Sources of Financing

in the

7. Plan for Financing Soviet Capital&9

8. Planned Expansion of Soviet Working Capital Norms,

Budget, and Enterprise Own

Soviet Budget Redistribution of Funds,lan

Investment, and Set Contribution to the Soviet

Budget, by Selected Economic7 Plan

Budget Allocations for

0 Plan

Financing of Scientific Research Inatitutes in

Outlays from the Soviet Budget for Social Welfare,


Relation Between the Soviet Turnover Tax

and Disposition of Profits in the Soviet

National Economy, Selected

Soviet Revenue from the

Soviet Budget Surplus and Extension of State Bank


Budgets of the Union-Republics of the USSR,

0 Piano

- vii -



of tbe Soviet State Budget,

of the Soviet State Budget,

Following Page

Figure 1. Expenditures of the Soviet State Budget,

0 Plans

Figure 2. Revenues of tho Soviet State Budget,


vlii -


r-.imaary and Conclusions

The state budget of the USSR,ajor part of the financial ay stem, la tbe chief vehicle for mobilizing the economic resources of the economy, formed mainly in the consumption sphere, and apportioning them between various competing endoinvestment, defense, social welfare, and government administration, lhe Soviet budget la far broader than Western national budgets, including, for example, funds for investment and operational expenditures of productive enterprises that are by and large privately financed in capitalist economies. Moreover, the method by which funds are distributed and redistributed by tbe Soviet budget aad financial system results In high prices for consumer goods and relatively lower prices for defense and Investment goods. This serious distortion of prices should always be kept in mind when considering relative magnitudes of Soviet plans stated in rubles, including the budget allocations themselves.

0 Soviet budget, presented to the Supreme Soviet this year by the new Finance. Garbuzov, provides for moderatelyupending ln nearly all categoriesFinancing the National Economy; Health, Education, and Social Welfare; and Science. Theexception la the explicit allocation Defense, which,as not changed significantly The stability of the explicit allocation Defense, however, must be viewed in referenc to other budget allocations, which have been increasing and which are believed to include indeterminate substantial outlays for military pro-

For cxumple, the state budget category Financing the National Economy, when divided by sectors of -he economy, contains an Other {unspecified) portion, which has more than doubled since8 planU billion rubles in3 planillion rubles in the0 plan). Thereinilar sharp rise in the Other portion of this category wnen divided on an end-use basis. Official Soviet sourcesttempt to discuss these

* Unless otherwise indicated, ruble values in this reportrubles. The official Soviet rate of exchangeor merchandise transactions andubles to US Si forother "invisible" transactions. ALthough neitherntries from rut

dollars, they do suggest the general order of magnitude.

increasingly large sums or even to recognize their existence. The conclusion seems almost inescapable that significant shares of these outlays are directed toward military or strategic programs.

Outlays for central investment will increase byoercents they didate somewhat below the increase ofo lh percent registered78 but still above tbeannual rate of increaseercent that was envisioned by the Seven Year. Ill general, over-all investment volume goals are being met; however, the budget presentation and debatecontinued concern by central authorities regarding theof investment resourcesarge number of projects. increases0 will be particularly great in the chemicalsmachine building, and netalvorklng and alsoesser extent in the oil and gas industry and the light and food industries.

The Social-Cultural allocation, consisting of outlays to Health, Education, and Social Welfare, will increase moderatelyith the fastest growing item still the allocation to Science (under The total outlay for Science continues to show the rapid growth that has been characteristic of this category sinceThese funds for Science, earmarked to "finance scientific researchre believed toood deal of military-oriented research, especially that connected with the rocket and earthPrograms.

Indirect methods of raising revenuesontinue to predominate The turnover tax is still the largest single item of budget revenue, although lt will decline somewhat0 both in absolute terms andhare of total revenues. This decline reflects mainly the delayed effect of8 agricultural reform, which, by raising procurement prices paid for agricultural goods without raising retail prices for these goods, has caused the turnover tax to fall. The loss in revenue from the turnover tax is more than offset by increases in profit taxes, which reflect the very rapid growth of profit in the national economy. Total planned profit0 willompared with9 plan, of whichercent will be turned over to the budget. Especially striking ispercent increase in industry profits that is plannedeflecting Increases In production and decreases in cost. Some dissatisfaction with the high rates of profit in some industries was voiced by the Chairman of the Budget Commission of the Soviet of the Union, who complained thatwholesale prices for new products in industry were set too high and remained in effect too long.

Income taxes on the population were planned to increase only slightly in0 budget. The details of Premier Khrushchev's

plan to abolish personal income taxes, presented and approved by the Supreme Soviet in Hay, may or may not have been taken intowhen0 budget was originally drawn up. In any event, the income tax abolition, which will be implemented beginning inill initially affect the lower paid workers, whose taxare slight. Therefore, the effect of the income tax abolition on0 budget will be small or even negligible.

Budgets of the union-republics for the first time will amount to more thanercent of the total. The increase0 is explained by the fact that all outlays for higher educational establishments, technical and professional schools, and uid to mothers now will pass through the republic budgets. In connection with the increasing flow of funds passing through the republic budgets, the Supreme Soviet this sessionew law "On the Budget Rights of the USSR and of tlie Union-Republics"the first such law As published, however, the law is expressed in generalities and contains little specific information concerning outlays financed by the All-Union budget as distinct from those financed through the republic budgets.

0 budgetontinuation of the trend, begunoward decentralization of economic administration. eries Of measures have been adopted5 to limit the role Of central authorities to certain key decisions in areas of primary importance to the regime and to transfer the more routine operational functions to local, ooncentral jurisdiction. umber of examples of thisin the financial sphere can be cited: the increased flow of budget funds through republic and local budgets at the same timeigh degree Of central planning of key items ouch as investment is retained; tlie shift in responsibility fcr purchase and maintenance of agricultural machinery to collective farms at the same that indirect' controls over the collective farms by the banking system have been expanded; and the increased reliance on enterprise owr. funds rather than budget funds in the financing of the economy.

Although the general trends cf fiscal policy and planning can be traced, the precise effects of many recent economic and financial,are often difficult to assess. These reforms have given rise to serious questions of interpretation of budget data, which cannot be Satisfactorily resolved without more complete informationbudgetary accounting procedures.

I. Introduction: What the Soviet State Budge', Means

The Soviet state budget is an extremely complicated institution. In its published form it often confuses and misleads as much as it reveals. The following general remarks are intended to give theroad perspective about (l) the scope and coverage of the Sovietts role in the Soviet economy,ts functionswith that of government budgets in market economies. In all these respects the Soviet budget Is markedly different from itsin market economies.

A. Coverag* of thet.

The USSR considersocialist economy based on Marxist principles. According to Soviet interpretation of one such principle, the state appropriates the "surplus value" produced in the economy (chiefly profit and turnover taxes) und applies it to investment,social welfare, and normal government administration. The state budget, administered by the Ministry of Finance, is theinstrument for carrying out this redistribution of funds.

Thus the Soviet budget is far broader than Western national budgets, as it includes funds for financing economic productivesuch as investment that are by and large privately financed In capitalist countries. Tlie largest allocation In Soviet budgetis labeled Financing the National Economy and is primarily for that purpose.

Finally, the Soviet budgetonsolidated budget, including national, republic, and local government activities. The entire Soviet budget ia almost one-half as large as the Soviet gross national productr approximately double the proportion of US budgets at all levels of government.

The budget is the principal mechanism for redistributing "surplus value" funds to the state's objectives, but it is not the only one. The budget is partovernment financial plan that also disposes of the retained profits of state enterprises. These retained profits are allocated for much the same purposes as the budget allocations to Financing the National Economy but do not pass through the budget. Enterprise own funds*arge andshare of total funds for Financing the National Economy,now to more than one-third of the budget funds for the same purpose.

* Enterprise own funds (sobstvennyyc sredstva predpriyatiya) consist mainly of profits, amortization allowances, and allowances for above-plan reductions in investment costs resulting from increased efficiency.

The discussion in this report, therefore, does not confine itself to the budget proper but considers, when pertinent, the wholeiscal system.

Another fiscal mechanism used to redistribute funds lo the Soviet economy ls the banking system. ignificant share of working capital in state enterprises is financed through bank loans, theeffects of which are offset to some extent by tho budget surplus.

Also to be considered are the collective farms, more than one-half of Soviet agriculture, which are nominally not state enterprises and which are not financed out of the budget. Nevertheless, because the state sets the prices that It pays the collectives, sets the share of receipts that the collectives must set aside for self-financing, and monitors all activities through the State Bank and the local Party organization, its control over the financing of the collectives is not much less complete than its control over industrial enterprises. farm financing must therefore be considered along withthe National Economy.

Slightly more than one-half of the funds allocated to Financing the National Economy, both budget and enterprise own, go forcapital repairs, and working capital, as one would expectocialist economy. The remainder goesreat variety of activitiesesult of historical accident or arbitrary decision rather than any rational accounting logic. Among these are operational expenses, such as on-the-job training of workers, many of which should be simply current operating expenses of producing enterprises. For example, the entire operating expense of machine tractor stationshile they still existed, was included in budget expenditures, and their gross revenues were included in budget revenues. In periods of priceart of the turnover tax paid into the budget is rebated to procurement organizations and Is listed under budget expenditure. Grants to foreign trade organizations, which suffer losses because of the arbitrarily low ruble foreign rate of exchange, are granted budget funds at tbe same time that import organizations, which benefit from tbe low exchange rate, provide offsetting revenues. In addition, Financing the Hational Economy includes, inter alia, subsidies toenterprises, bonuses of various kinds, and some categories that look suspiciously like defense expenditures.

B. Role of the Soviet Budget

In Western countries, budget revenue restriction isatum in the formation of national economic policy. In Sovietthe budget has no such prior precedence. The economic plan

(mostly In physical terms) comes first. The financial, plan,the budget, is its reflection In rubles. While Soviet leaders certainly plan within the resource limitations of the eccuomy andthink initially in terms of quantities of steel, power, cement, and labor, they cannot perform deluiled economic planning withoutto ruble values, and the economic plan, whether expressed Interms or ruble terms, must balance. Particularly In relations with the public, where transactions are conducted in monetary terms, Soviet leaders have been very much aware of the desirability ofpurchasing power with availability of goods.

The aost Important role of the financial plan la probably in implementation rather than in initial planning. Allocation of fixed funds to subordinate agencies and monitoring of expenditures by the Minlatry of Finance and the state banks is an important part or the controlling of the economic system and of guaranteeing that theplan ie carried out more or less no the state desires.

The Soviet financial plan in the vehicle for transferringfunds and resources from consumption to savings and investment. In thia sense It performs the same function as savings and investment institutions of capitalist countries. Ibe radical difference lies In the fact that Soviet tax aad coat accounting practices act to raise drastically the prices of consumer goods and to lover the prices of investment and defense gooes. The turnover tax, which provides the bulk of elate revenue, la almost exclusively applied to consumer goods. On the other hand, pricea of Induatrial goods are setlowonsequence of Inadequate depreciation charges, the absence of Interest charges, budget financing of much research and development, budget aidariety of exceptional operationaland in some cases plain subsidies.

This redistribution of funds, resulting in serious distortion of prices, should always be borne ln mind when considering theaagnitudes of various Soviet plans stated in rubles, including budget allocations themselves.

C. The Budgetource of Econostie information

The budget and financial plan that is available In fullto Soviet planners wouldealth of economicbut the published budgetitifully emasculated version of the original. The published version is highly aggregated, large magnitudes arc unspecified residuals, and the content and coverage oi many of the categories arc only partly known at best. Fordefense expenditureingle number in the budget with no breakdowns. Worse than that, there is good reason to suspect that

activities vhlch one would believe were covered by the defense budget item are in fact covered in other categories in Indeterminate

Definitions and coverage of categories furthermore change from year to year, frequently without notice. In addition, there hasendency for unspecified categories to increase as aof the total in recent years. Trends in announced financial categories must be scrutinized with great care. For example,7 administrative reorganization of Soviet industry and construction must have affected Soviet budget categories, but no specificon the subject has appeared.

Thus only tne broadest kinds of conclusions about trends in the economy of the USSR can be drawn from financial information alone. Nevertheless, Soviet budget and financial data constitute one of the major sources of raw material for Western students of the Soviet All attempts to construct Soviet national income and productrest heavily on financial data.

This report ls intended to summarize the present state of our knowledge regarding the content and accounting significance ofbudget and financial data, with special reference to0 budget.

II. Expenditures

The general trends in Soviet state budget outlays, asay be seen In the chart, The twocategories. Financing tbe National Economy andwill increase moderatelys they didtbe general pattern established inyear ofYear. Within these categories, shifts havefor example, the Other (unspecified) sectors of theallocation have grown very rapidly as have outlays under(Science) ln the Social-Cultural allocation.

The explicit Defense budget, established before the announced troop reduction plan in January of thia year, remains at the same level that it has occupied n thia category, hovever, may be offset by undetermined Increases in other categories believed to cover the new and expanding nreas of military development.

Outlays for Administration are planned to decrease slightly,esult of recent campaigns to reduce such expenditures.

A few general remarks are made (A,elow) concerning theFinancing the National Economy; this budget category is analyzed by sector (A, S, below) and by end use (A,nd generalconcerning budget redistribution of funds are presented (A, below). An analysis of tbe explicit Defense outlay category is(B,ajor trends in health, Education, and Social Welfare outlays are discussed (C,nd Administration andoutlays are dealt with (D, below).

A. Financing the National Economy

1. General Reaarko

The budget category Financing the National Economy, which accountsopercent of total budget expendl fores, provides funds for Investment, working capital, and operational outlays of Soviet productive enterprises and organizations. Unlike other outlay categories, which finance institutions alaost completely dependent on the state budget for support. Financing the National Economy deals basically with state enterprises and organizations that are independent accounting unitshat ie, these enterprises operate on the principle of econoaic accountabilityharging costs of operation to revenue from sale of product. Any Burpius revenue (profit) either


io turned' over to the budget, aa profit tax or la retained by the enterprise and used for investment, working capital, and other needs. The major share of investment funds, however, is provided by direct budget grant.

The fiscal category Financing the national Economy thus includes not only the budget allocations to Financing the National Economy (aboutercent of the total) but alao retained profit* and amortization funds of enterprises and organizations. Theof both budget and enterprise own funds for Financing theEconomy is centrally determined and is part of the over-all financial plan.

2. by Sector


utlays from the budget to Financing the National Economy have been increasingapid rate, with met of the increase occurring In tho Other (unspecified)" Tables In general, trends in allocations follow the expected pattern: allocations to Industry have been increasing moderately as industrial production has been expanding, allocations to Agriculture have decreasedesult of8 agricultural reorganization, and allocations for Transport and1 cat ions have increased gradually. The Other (unspecified) category, however, haaemarkable lncreaae vhlch is difficult to explain on the basis of available information.

Shifts and the Category Other (Unspecified)

Outlays under the category Otherhich were fairly stable atillion toillion rubles inlan period, have doubled since6 plan. These outlays probably began to rise in the courseizable share of the above-plan outlay ofillion rubles under Financing the National Economy probably occurred in the category Other. Since then this category has continued to increaseapid rate. Although there Is noexplanation for this rapid rise, the following pertinent factors may bo cited:

(l) Beginningousing and otherInvestment formerly under the Jurisdiction of enterprises and organizations was shifted to local Soviets, thus presumably shifting allocations for this investment from the specific sectors, especially Industry, to the Other (unspecified) category.

ollows on* ollows on p.


figure I





^iOMAL eccw

illion Rubles

TOTAlillion Rubles

S7 0

. 1 tIs I

tm ere11

I ttm i



Table 2

Plan for Financing the National. Economy in the USSR by Enterprise Own Funds, by Economic Sector

Billion Current Rubles

Economic Sector






if. (For serially numbered source references, see


subordination only that is, excluding investmentand river transport and communications of union-republic

8 Increase In prices paid tofarms for agricultural produce required substantial additional outlays from the budget to procurement organizations as afor price differentials. Butrices were adjusted and these outlays no longer required.

Unspecified revenues of the budget also began to increase sharply and inexplicably Although there ls no specific evidence, the possibility arises that in some fashion the budget has become morend some types of activity formerly netted outside the budget are now included in both income and outlay of the budget.

The Soviet economy under Khrushchev hasa series of reforms and reorganizations whose precise effect on the budget is unknown. In particular,7 reorganization of management ln Soviet Industry, byector-of-industryuniterritorial administrative unit, may well have completely changed the coverage of budget categories.


t ia often argued that certain types of mlll-tary or atrategic outlays are bidden in unspecified portions of Soviet statistics. Because outlaysilitary nature do occur in theFinancing the National Economy, the possibility cannot bethat the Increased size of the residual reflects some type of military spending. Some support for this type of argument may be found in the fact that the outstanding part of Other (unspecified) outlays are found la tbe central All-Union budget, where most of this type of activity would be expected to occur.

The category Other (unspecified) Includes somefor which scattered information is available and tentativecan be made (Trade, Agricultural Procurement, Price Differentials, and Municipal Economy). Other itemsfor example. State Reserves and Gold Purchases cannot be estimated even tentatively and areIn the Residual.

The allocation to Trade haa been estimated on the basisata. 5 the allocation from the budget to domestic trade was plannedillion rubles, and6 lt amountedillion rubles. 2J The allocation to trade elsewhere glvea7 billion rubles52 billion rubles6s assumed, therefore, to include reimbursements to foreign tradomade necessary because of the overvaluation of the ruble in foreign exchange (see, below). No comparable figures have been publishedlan or actual. Il Has been assumed, for the estimates In Tablehat such outlays have been proportional to total Soviet exports. This assumes world trade prices to be constantthey rose slightly7 and have been declining slightly ever/ It alsoonstant mix of Soviet exports. The series estimated inhus should be taker, as no aore than an approximation.

Outlays for Agricultural Procurement also have not been available They are assumed to be conatant because costs probably have been falling (as have trade costa in general) although the volume of activity probably has been expanding. Outlays in this category include grants mode by the budget for the usualbut are not large enough to include price differential grantb.

Price Differential Grants from the budget areIn years when prices paid to farms increase with uoincrease in wholesale or retail prices. For example,, higher procurement prices may be estimated to have cost the state budgetillion toillion rubles. But, by the time0 budget was drawn up, wholesale prices lor agricultural produce had been adjusted upward, thus ending the necessity for budget grants


omplete discussion of this problem, see IU, A, below). On tbis score alone, the Other (unspecified) category should haveecreasend in fact the corresponding category of the RSFSR budget doesbillion-ruble decline Evidently in

the case of the All-Union budget, however, there are offsetting factors.

Municipal Economy outlays have been Increasing Btcadily, although tbe large Increase9 resulted mainlyategory shift rather then from an expansion of activity. 9 It waswherever possible to shift housing and other nonproductiveformerly under the Jurisdiction of enterprises andto local Soviets. 6/ This meant, for example, that housingsupervised by an industrial enterprise and included underIndustry was transferred to local sovlets and Included underthe Municipal Economy. Analysis of the budget for the RSFSR, which accounts foroercent of the total outlaya under the Municipal Economy, indicates that this allocation doubled ln9 plan compared with3 plan. f the size of outlays for the Municipal Economy lnre baaed on data for the RSFSR.inanced under thlo category are municipal services (gas, electricity, water, public transport, and roads) as well as housing under the local Soviets. Enterprise own funds available for thia purpose are alight, amountingillion rubles ln0 plan. 8/

The Residual finances, among others, such measures as Gold Purchases, State Material Reserves, and Geologic Prospectingactivities whose alze cannot be estimated with any degree of certainty. It is difficult to see why such activities have been increasing so rapidly or why they are so large. One possibility discussed below is that 8tate Reserves may include purchases of significant amounte of military hardware (seeg> below).

c. Nonagrlcultural Sectors

Funds to finance industry include budget as well as enterprise own funds. They haveairly constant annual rate of increase ofercent between6 plan and0 plan. triking feature of0 plan allocation, however, lies ln the relatively large Increase In enterprise own funds financing and the much smaller increase in budget funds (see Tableshe latterecline fromercent of the total planned3 toercent planned The increased use of own funds Is certainly to be expected, given the sharp rise of profit In the national economy. On tho other hand, the trends do raiseasic reshuffling of catenaries may also be involved.


- Ill -

0 allocations to Tranaport ond Communicationslight Increase A3 in Industry, the increasealnost wholly in enterprise ovn funds and not in budget funds. The transport allocation rose rather sharply9 indicatingeffort, perhaps in the electrification und dieselisation of railroads or in track replacement, or, more likely, reflecting the development of civilian air tranaport.

d. Agriculture

The allocation to state agriculture*0 is planned3 billionun approximately equal to9 Plan ofillion rubles (see Table. Outlays froa the budget for state farms, however, willather significantfrom Ik billion rubles ln9 plan toillion rubles in0 plan,ontinuation of the policy begun7 of transforming weaker collective farms into state farma.ncreased allocations may also reflect higher state farms costsfrom the new higher prices for supplies and equipmentln the course Outlays for the repairow entering the second full year of operation, have been reduced somewhat, as have outlays for other agriculturalforestry, irrigation, experimental stations, landveterinary services, and the like.

xtudget statistics dealing with agriculture must be viewed within the context of recent reforms which have profoundly affected tne relation between the budget and the agriculturalof the economy. Iheuc reforms, originating with the central committee decision in3 to raise the prices paid by the state for agricultural produce, are intended to Improve thaposition of collective farms, thereby Increasing the area of collective responsibility and, it is hoped, the efficiency of agricultural production. The most striking feature of thethe abolition of the machine tractor stations (MTS's)hifted the burden of purchasing and operating agricultural equipment from the atate to the collective farms, in return for which collective farms were paid higher prices for their produce. esult, cullectlve farae purchased equipment from the MTS'a valued at

viet term state agriculture includes state farms, thetractorepair tractor stationsnd general agricultural programs (irrigation, experimental stations, and theut It excludes collective fares. In most cases,labeled state agriculture include forestry, and in many cases they also Include activities or the State Committee for Grain Products. ollows on

Table 3

Allocations to State Agriculture in the USSR a/ Selected

Billion Current Rubles

8 Plan 9 Plan C Plan

Total financing








centralized investment



investment figuresre from Tableelow.

tractorepair tractor stations.

figure maymall amount of enterprise own fundsto budget funds.

illionillion rubles of this sum was paidillion rubles was plannedillion rubles is plannednd the remainder will be paid. U/

The net effect of the agricultural reforms on the budget is difficult to assess because of the many factors which must be taken into consideration. The abolition of the MTS's resultedrop in budget outlay for this purpose from6 billion rubles planned8 toillion rubles planned9lanned On the other hand, budget revenue from the MTS's fell9 billion rubles planned8illion0 income from this source will be confined to PTS profitto the budget, which are negligible. The net effect on the budget of the abolition of the MTS's isrop in outlayillion rubles.

On the other hand, the increase in prices paid tofarms for agricultural produce, unaccompanied by anyincrease in retail prices, has meant in someizable budget grants to procurement organizations in the form of price differential reimbursements and ln laterizable drops in receipts of the state budget from the turnover tax (sec III, A, belov).

The decline In budget outlay for investment9 billion rubles62 billion rublesas been offset by increased collective farm investment. The latter has increased5 billion rubles plannedoillion plannedboth figures include State Bankhe Importance being placed on collective farm investment aay be seen by the fact that, according to the Seven Year Plan goals, of theillion rubles to be Invested In agricultureollective farms vill accountillion, lh/

Mechanization of agriculture ln the USSR is of key importanceeans of releasing labor from the agricultural sector of the economy to the industrial sector. It is Interesting to note, therefore, that the regime ls relying so heavily on collective farm investment rather than on state farm investment, as the former has not been tried in the past andector of the economy lees subject to effective central control. An indication of the Importance placedhe iKchanlzatlon of agriculture is evidenced by the fact that expenditures for "Mastering tbe production of ncvf agricultural machinery arc absorbed by the state budget, in contrast, to general policy, vhlch is that such outlays usually are charged to coot und included in price. Thus, in effect, prices for new models of agricultural machinery arc more attractive compared to prices on old models than Is generally the case (see j, h, belov).

Increased investment by collective farms is madeby the fairly rapid rise in collective farm income (see TableCollective farms, since they are not state enterprises, pay Income taxes rather than profit taxes. General trends in collective farm Investment, and taxes inTI may be seen In Tabla h. The increase in collective farm monetary income has raised certain problems because this sector of the economy is less subject to central control than the state sector. Complaints tiave been made thatfarms arc not diverting enough of their resources into thefund.** Ineorganization of the Soviet banking

Tablefollows on

** The Indivisible Fund consists of collective farm communal property, including fixed assets (such as buildings and equipment) and financial resources earmarked for investment ln, or cujvltol repair of, productive assets.


Table 1*

Soviet Collective Farm Income, Taxes, and Deduction to the Indivisible

Billion Current Rubles







U7ko toi




to the Indivisible Fund g/


b. Fromppendix B,elow, c


system went into effect, an Important feature of which waa tbe cc soUdatlon of all banking functions in rural areas into the State Bank. onsolidation may have been prompted by organizational considerations, but eome of the motivation may have been provided by the desire to keep closer account of individual collective farms by having all banking activities confinedingle

It is now being argued ln some quarters in the USSR that prices paid to collective farms are too high. Khrushchevat the Central Committee Plenum of9 voiced some dissatisfaction with the existing price system, pointingeedpayment system on the collective forma that will precludehigh, unjustified f the resolution adopted at the December Plenum called upon the Soviet State Planning Corralssion, the Ministry of Agriculture, and tbe Ministry of Finance to drawlan for the reduction of purchase pricesumber of farm products sold to the state by the collective farms and tho approximation of these prices to the prices of products delivered by the state Thus some reduction of prices paid tofarms may be expected in the near future.

Ibe whole problem of the relationship between thefarms and the state farms has come to tbe fore recently. Evidently the cost (acbestoimost') of state farm production was to some extent the criterion for the collective farm purchase prices set


It has boon Implied that the agricultural reforms of

theears henefited the collective farms mod neglected the state faros. The latter vere not benefited by the increases In prices paid for agricultural produce but were adversely affected by thein8 of uniform wholesale prices for tractors, trucks, agricultural machinery, and sp'ire parts, which were, in effect, higher than the prices state farms had been paying previously. esult, outlays of state farms increased by soreillion rubles in9 plan alone, leading to decreased profit and even planned losses (profits of state farms have historically been very low or even This may, at least partly, explain recent increases In state farm allocations, at least9 (see Table At the present time, according to one Soviet publication, the Soviet Ministry of Agriculture Is workingroposal to change the purchase price (sdatochnaya tsena) for the agricultural production of state farms with the aim of "stimulating the lowering of costs of production andinimum level of

Ihe foregoing Is, of course, no reason for theprices of state farms to be as high as collective farm prices as long as state farms receive considerable sums from the state budget. Budget outlays are used for capital Investment, forming herds, growth of working capital norms, and also operational cxpenditurea such as housing losses. The many statements calling for increases ln prices paid to state faros seea to be based on the assumption that stateshould ln the future rely less on state budget financing and more on own funds The0 increase in budget allocations to state faros, however, indicates that no significant steps in this direction have been taken as yet.

3. Allocations by End Use

a. General Trends

In< budget outlays tn Financing the National Economy are classified according to end use (investment, working capital, subsidies, and the like)6 and0 plan. Because official Soviet budget statistics are not published in this fCra, most figures are estimates which represent general orders of magnitude rather than precise sums. Particularly tenuous arc the estimates for Subsidies and Price Differential Grants, which are open to rather large margins of error. No attempt was made to listsuch as gold purchases, slate reserves, and other items for which there is insufficient information on which to base reasonable estimates All these Items are therefore lumped together under the category Other.

, above. ** ollows on

Table 5

Budget Outlays for Financing the National Economy in the USSR

by End6 Actual0 Plan

Billion Current Rubles



Capital Repair

Expansion of Workingc/


Grant to MTS'sDifferential Grants f/


Premiums in

Planning Design Bureaus


Of which:

Industrytoto hj.O)


figure6 is given in;0 it isthe same portion of total budget investment (see Tables allocated under the category Financing theercent).

based on scattered data5 gk/ andillion-ruble allocation for capital repair forof local Soviets (see par. b, below).

c See Tableelow.

par. d, below.

plan budget allocation to the MTS's7 billionf which overillion rubles may be considered(on the basis8 billion rubles planned

par. e,

2j/ ee par. h, below.

in parentheses are estimates.

roughly, as the total budget allocationppendix B,elow) less the estimatedof all items in the table. 6 the industry share ofmay be found in,0 an estimateillion rubles waa used.


The most striking feature ofs the increase in the Other (residual) category. This same conclusion was drawn from the analysis of the Financing the National Economy allocation broken down by sector of the economy. To make the residual inore closely comparable to the residual in Tableheportion may be excluded and the nonindustry portion alone It may then be seen that. In addition to the residual-operational type of outlays to industry, which are fairlyillion toillion rubles) but fairly stable, there are also unexplainablc operational outlays to the nonindustrial sectors, which are not oaly fairlyillion toillion rubles) but are also rapidly growing (having approximately tripled ineriod). Moreover, these unexplainable residual outlays tosectors show the same size and the same trend as residualunder Financing the Hational Economy broken down by sector (see This result is to be expected to the extent that both residuals include items such as state reserves and gold purchases. The important fact to note here ls that, whether dividedector-of-the-economy basis (as in Tabler an end-use basis (as inhe most striking increases in the category Financing the National Economy occur in the Other (residual) portionthat is, in those activities which the regime does not choose to disclose. This fact Suggests, although it does not prove, that military programs may be involvedfor example, under State Material Reserves.

b. Investment and Capital Repair

The total volume of capital investment in the Soviet economy continues to growapid rate, although the high annual rates of increase ofo lh percent recorded7the reaction of Soviet planners to certain inadequacies of the now defunct Sixth Five Year Plan, have been reduced to annual rates ofoercent9 The latter are still somewhat higher than the average annual rate of increaseercent that was projected for the Seven Year

Investment under the central plan0 willhy approximatelyercent compared with9 plan andpercent compared with9 actual. Investment increases will be particularly great in the chemicalsachine buildingetalworkingnd alsoesser extent in the oil and gasercent)

* bove.

Mndustry residual intill differs from the residual, iny the inclusion of operational allocations to agriculture and to transport and communications and by the exclusion of allfunds.

and the light und food induatry (Ik/ rogram was marked by certain eh artfalls in the centralplan (fulfilled byhich were offset by higher than anticipated outsldc-plan investment. This situation ls cause for some concern to Soviet planners because of the key Importance of projects financed under tho central plan. The basic trends ln the expansion of capital investment in the USSR, both centralized and decentralized, may be seen in

The budget continues to provide tbe major share of funds for centralizedercent in, although its share has declined somewhathen lt vas planned at Ik percent. Profitslightly growing share,oercent, as might be expected given the generally rapid growth of profits in the economy. The share of amortization allowances hasconstantlthough some upward adjustment may be expected in future yearsesult of9 revaluation of the basic fund (capital stock). Minor miscellaneous funds account for theercent.

The series for financing capital investment differs in coverage from the volaae of investment figures Iny the inclusion of working capital In construction. Moreover, theseries presumably is presented in current rubles, whereas the volume series Is expressed in constant planning rubles. 6 the volume series has been presented in planning prices5 with some upward adjustment Tor subsequent changes ln vsges and input norms. Tbe financing investment scries ls available only by plan; actual outlays rarely are published. It ls usually pointed out in Soviet textsizable portion of the Reserve Funds of the Councils of Ministers is used to finance investment. The need for such supplementary funds6hen tbe investment volume was overfulfilled, is evident in Table 6. The need8hen actual volume was about equal to or lees than plan, Is not obvious. It is possible, of course, that investment costs have been rising, requiring greater outlays of financial means toiven level of volume of capital Investment; on tbe other hand, there is no evidence that investment costs have risen

Data for the allocation of investment funds under the state plan0 have not been published.89 plans. Industry accounts for by far theshare of investment funds (aboutercent). The increase in

ollows on* ollows on p. 2k.


: = f


Table 7

Plan for Financing Soviet Capital investment by Economic Sector89

Billion Current Rubles

r.'. .- r f tew-t Budget Anortltatlon

















coverage of capital Investment in industry and transportas presented here is evidently less than that ofcategories ln. belov.


figures are believed to be compurable. tated to exclude motor and river tranaport of union-republics, figure to include transport of All-Union subordination only.

investment in Other sectors, paralleling the increase in Otherin the category Financing the National Economyhole, is believed, at least partly, tohift of bousing and otherinvestment froa the specific sectors to the category Other (see under Financing the National Economy). This docs not preclude the possibility tbat other factors may be Involved as well.


Two problems of finance and control of investment continue to plague Soviet planners. One concern has been the rapid growth of decentralized investment, for which the necessaryof physical materials is not coordinated or approved at the Inormer Finance Minister Zverev commented that the anticipated level of decentralized investment ln thatillion rubles) was ln many cases not backed by the necessarymaterials, and consequently resources were diverted away from state planned investment. The level of decentralized investment in that year turned out to be even higher than that anticipated by Zverevillion Instead ofillionnd it continued9 to the level of jO billion rubles. In0 budget message, the new Finance Minister, Carbuzov, again complained of the size of decentralized investment and, in answer to the deputies who again demanded increased retention of profits by local industry,that the government has recognized the necessity to bringinto procedure for aboveplan outlays for capital construction and hasommission to workorresponding proposal on this/

The second concern of Soviet planners in the field of Investment, somewhat related to the first, is the dispersal ofresources within the central plan. This theme has beenstressed in Soviet journals particularly since the6 central committee plenum, but apparently without the desired effect. herefore, the Soviet State Planning Commission drewistrojects considered to tie especially important0 and directed the councils of the national economy, enterprises, construction trusts, and other organizations to concentrate their energy on these projects. The main branches of the economyby these projects are pig iron, iron ore, steel, rolled metal, oil processing, cement, synthetic rubber, and artificial fiber; their value0 will totalillion rubles. 3Jl/

In conclusion, it should perhaps be pointed out that the bulk, but not all, of budget outlays for investment occurs under the category Financing the National Economy.5he only years for which data are available, outlays under Financing the National Economy wereercent of total budget investment outlays. Investment in Social-Cultural, Defense, and Administrativeare made under the corresponding categories.

In addition to capital investment, the budget also allocates funds for capital repair. The latter is financed basically by amortization allowances, then by profits of economic organization, und,ast resort, by the Of course capital repair of budget institutions (schools, hospitals, and administration buildings)


Is financed by tbe budget, again ln tbe corresponding category. Capital repair under tbe category Financing the National Economy, consisting of repair of roads and other municipal property. Is alight. For example, In0 plan, allocation from the state budget for the capital repair of the housing of local Soviets vas announcedillion; total budget outlays for capital repair under this category probably are not much in excessillion rubles at present.

c. Working Capital

Expansion of working capital norms Is planned to9 billion rublesfillion rubles will beby budget funds6 by enterprise own funds (seeere again, there may belight trend away from7 the budget waa to provide one-third of the total increase;0 it is to provide one-fourth.

Table 8

Planned Expansion of Soviet Working Capital Norms, Budget, and Enterprise Own Funds a/

Billion Current Rubles

Budget Enterprise


own funds

Working capital norms refer to the minimum working capital needs of enterprises and organizations and are supplemented to an increasing degree by State Bank short-term loans. The sources of existing working capital vary considerably, with own fundsroportionally larger share of the total inercent)uch smaller share in

Control over the proper use of working capitalonstant theme in Soviet financial literature. Complaints are made that enterprises misuse working capital, directing lt toward fixed


Investment or for the purchase of stocks of unnecessary materials needed Control over the working capital plan lo an important tool to prevent possible overexpendltures of the wage fundan old problem for Soviet planners. Since" State Rank reform, wage fund overexpenditurcs hav* been brought under more adequate control.

d. Subsidies

ignificant number of Soviet enterprises are unprofitable (the so-called "planned-loss"lanned losses In most cases arc made up by the transfer of funds from other profitable enterprises. Moreover, many outlays from the budget for operatiooal activities of enterprises, such as scientific research and development or on-the-job training, are not classified asin Soviet terminology. Subsidies from the state budget (goau-darstvennyyeairly commonave fallen into disfavor, exceptew areas of the economy.

The timber industry, faced with steadily increasing costs, was slated to be the only branch of Industry operatingoss asoj and was no doubt receiving stateuntilhen prices were raised and louseswiped/ Meanwhile the coal industry had been experiencing difficulties. 5 it was barelyrofit, kz/ and for tlieonths6 costs were higher than planmust have continued to Increaseesult of the wage reform and growing osses in tbe coal industry were plannedrubles (see The municipal economy has long hadbalancing Income and outlay, particularly In the case ofand aid from the budget is frequently wntioncd in this connection.

Although the absolute size of subsidies is not known directly, lt Is possible toentative estimate ofillion toillion rubles annually5 on the basis of two separate series on profits. For example,otal profit of state and cooperative enterprises was planned at aboutbillion rublesthe suat billion rubles for state enterprise profit (seend on estimatedillion rubles for cooperative organization. UUf In Soviet statistics of "moneyowever, profit of state and cooperative organizations, excluding "losses of some productive enterprises and In the communal housingas plannedillion rublesi/ Thus the difference between the two series2 billion rubles- assumed to be the size offrom the budget. ubsidies probably have been Stable or may have been increasing slightly.

* P. elow.

a. Price Differential Granta

Outlays from the budget for Price Differential Grants may he divided into the following three types: (l) grants to foreign trade (export) organizations in compensation for the overvaluation of tbe rubles ln internationalrants to Gosbank to cover premiums-markupa paid for certain types of agricultural raw materials used in induatry,rants to procurement organizations ln years when prices paid for agricultural produce are increased.

to foreign trade organizations arebecause these organisations purchase goods for export andthat have been Imported at Soviet Internal prices (usually Foreign currency, however, is converted at the arbitrarilyofrublesollar, and therefore export organizationslarge accounting losses and import organizations profit. Inimport organizations are distinct from exportgains of Import organizations enter tbe budget as revenueof the export organizations are paid out of the budget as The gross size of these grants was ln the neighborhoodbillion toillion rubles, and they have beento have increased, on the basis of tbe general lncreaae ina, to approximatelyillion toillion rubles currently

(see. The grant is more thanercent as large as totaluggestingore realistic ruble-dollar exchange rate, at least for items exported, would beubles perrather than the official rateo 1. One important byproduct of the currency revaluation to go into effect in1 may be the establishmentore realistic foreign exchange rate that would reduce or eliminate the need for budget payments and receipts.

, grants from the budget aspremiums-markups vere plannedillion rublea, ofbillion vent to light industry for rav flax andthe food Industry mainly for scat and milk,illion Use of these grants has been criticized byfinance, including Finance Minister Garbuzov, and they havereduced or eliminated in the course ofrice

The need for special financing of premiums-markups arose because procurement organizations paid premiums-markups to farms and farmers for technical crops outpecial Gosbank loon account. The loans vere then repaid by the processors, vho included in their costs, and subsequently In their selling price, an average allovance

* bove.


for premiums. By thes, however, premium payments to farms and farmers had significantly increasedorrespondingadjustment in average allowances paid to Gosbank. by the processors. The differences were made up by budget funds, kjj

rants to agricultural procurement organizations from the budget are necessary in certain years when prices paid for agricultural produce are increased without corresponding increases in wholesale or retail prices (sec III, A, below),

Design Bureaus

Planning design organizations, which had been directly supported by the budget sinceere transferred to khozraschet as of Under the new system, they will be paid directly by construction organizations for services performed; these costs will then be included under the construction portion of investment statistics. The general level of project design work is Plannedillion rubles forj^/ Notroject design work, however, has been transferred to khozraschet. Still financed from the budget are such activities as designing new models; planning research and carrying on experimental work connected with theof new machinery into construction; establishing All-Union norms for research, design, and construction; and drawing up designs for rayons, cities, and

Material Reserves

Purchases of goods by the Chief Directorate for State Material Reserves, including "industrial agricultural transport, food, defense, and other types ofppear under the category Financing the National Whether defense good6 in State Reserves Include more than food and clothingor example, military hardwareis not known for certain, Recent evidence, however,that these items could be fairly sizable. It should be recalled that undisclosed outlays in the category Financing the Nationalwhether viewedector-of-the-economy or from an end-use point of view, uppcar unreasonably large unless some extraordinary activities, such as major defense programs, arc included. The recent Soviet weapons programs are undoubtedly costly.

A Western study of Soviet national income statistics called attention to the factignificant share ofercent, or aboutillion rubles,s devoted to Reserve Funds and suggested that the large size of the itemthat producrmcnt of military hardware is Support for the thesis that military procurement, at least for some types of


goods. Is classified under the Reserve Fund In national incomemay bc found in the following definition of this categoryoviet economist

The fund of reserves combines, first, state materiel reserves whichong-term character; secondly, reserves of means of defense /iTredstvu pl>oroi-.y7pecial character; and, thirdly, current operational reserves of the Soviet ofused ln the course of fulfilling the annual plan for satisfying newly arising current requirements.

A problem arises, however, when the attempt is made to relate national income categories to state budget categories. Tn tho quotation cited above, the first element, state material reserves, obviously refers to activities of the Chief Directorate for State Material Reserves, under Financing the National Economy. The third element obviously refers to Reserve Funds of the Councils of Ministers, which are included under miscellaneouB outlays (see D,, below). Tho second element, "means of defense having specials It is impossible to determine what types of items arenor is there any means of relating it to any one budget category. lausible hypothesis la that outlays for military end items, certainly those "having specialrc financed In some special May. Perhaps they are purchased by the Directorate for State Material Reserves and made available to the Ministry of Defense without being charged to the explicit Defense budget.

h. Developmental and Other Outlays

The extent to which scientific research andoutlays are financed froa the budget category linancing the National Economy Is difficult to determine. That sot* research and development ie financed in this way, especially when itnational-economic" character, is clear from any textbook discussion of budget outlays under Financing the National Economy, but general support for reaearch carried on in aclentlflc institutes comes from the budget category Education. Development of prototypes end the "mastery of production" either may bo financed from the budgetFinancing the National Economy or it may be charged tocosts of production (sebeatolmost'). Recent discusalons of problems in price formation suggest that,eneral rule,outlays are financed by the latter methodthat is, they


are charged to enterprise cost and amortizederiodears. On the other hand, the budget is responsible for the support of aircraft experimental factories, which are grossnd it finances outlays for mastery of production in the case of agricultural

A category that may conceivably be fairly large is starting costs of new enterprises. These costs are paid from the budget category Financing the National Economy when, as is often tne case, they are not included in the state capital investment

Supervision over the mineral resources in the USSR is exercised by the Ministry of Geology and Mineral Conservation, which along with its local organs is financed fully from the budget. Its activities include exploratory drilling, exploiting, and other/ Supervision over forest reserves, including afforestation and protection of forests, is exercisede Ministry of Agriculture and its local organs, which all are budgetary institutions. Part of their work, however, is financed by the sale of forest produce and other Also included under this category are miscellaneous outlays, such as on-the-job training of workers and purchases of the annual gold production by the Ministry cf Finance.

4. Soviet Budget and the Distribution of Resources

The Soviet planners, by fixing price and output levels for the Soviet economy, determine the amount of "surplus value" (chiefly profit and turnover taxes) accumulated In each sector. By then allocating this "surplusither directly through the state budget or indirectly through central planning of interna] the central authorities determine the distribution of resourcesvarious competing ends. Tableeneral, although limited, picture of the budget distribution of funds by sector of thc-econcoy. On the outlay side appears the budget allocation to Financing the National Economy by sector, and on the income side is listed budget revenue from profit taxes by Sector- Existing data do not permit the breakdown of other revenue items by sector. Clearly the netto the budget varies greatly by sector, from plus l8 billion rubles ir. the case of light industry to minusillion rubles in heavy industry. If effects of the turnover tax, an excise tax levied almost exclusively on consumer goods, ^cre taken into account, the losses of the heavy industry sector would not be ouch less, but gains from light industry would be much greater. Tnehe figures on agriculture should not be overemphasized, because collective farm activity, accounting for two-thirOO OS' agricultural production, is excluded.

ollows on


Table 9

Soviet Budget Redistribution of Funds, by Economic Sector


Billion Current Rubles

Budget a/ Budget Income b/ Net fromBudget

Heavy Industry


Agriculture and Forestry

Transport and


a"! - Revenue to the budget from the MTS's (seeppendix B, p. 6% below) haB been deducted from both the total and the agricultural sector to obtain the net effect.

produceroncept broader thanbecause it includes processing of rav

The procedure by vhlch the Soviet budget finances various sectors of the economy resultseries of distortions in Soviet prices. Basically prices are fixed equal to costs of productionlus profit. Because, however, investment and various budget grants for operational expenditures of enterprises are nota cost of production, prices, especially in the highly capital-intensive branches of the economy, are relatively lower than those in other branches, especially the less capital-intensive branches. although profit rates arc normally set at approximately 5of cost, the actual rates of profit, whether calculated as aof costs orercentage of investment, vary tremendously from one sector to another and even within the same industry (see III, B, below). Thus, for example, profits in light industry are relatively


high, reflecting relatively higher prices in this sector. Third, the levyurnover tax almost exclusively on consumer goods makes retail trade prices relatively much higher than wholesale prices.

Sinceleading Soviet economists have been engagedreat debate concerning the best method tooreprice system. Many proposals have been made, some calling for uniform rates of profit calculated on the basis of fixed and working capital funds, and others calling for minor changes within thesystem of price determination directed chiefly toward theof extremely large profits or losses. The request in October by tbe Budget Commissioneview of wholesale pricesrobably will result in soae modifications of the present price(see III, B,ut it is unlikely that any radical change in price fixing will be made, given the present lack of consensus among leading Soviet economists.

Related to the problem of proper price fixing is theof financing capital investment. ompares profit and profit distribution, by economic sector, to investment and investment sources, by sector, Many liberties In interpreting data have been taken in drawing up the table, but these are not believed to have any great effect on the general picture. Clearly there Is little correlation between capital Investment and the profitector, and in fact the rather high profit in light industry may be viewed aa one device to force the savings in that sector necessary to finance the investment program.

The problem of determining the econoaic effectiveness of capital Investment, which has received ouch attention from Soviet economists in recent years, is not Uie concern of the present report except to the extent to which budget financing of capital expansion is Involved. On thia subject, proposals are being nnde along two lines, both of which would result in increased prices in sectors whereoutlays are high and in less reliance on the budget In generalource of financing capital investment. One proposal calls for raising the shore of Internal funds of enterprises and economic organisations ir. tho financing of capital investment. ThiB proposal wouldincreases in prices (and thereforearticularly in those sectors of tho economy in which investment demands are high. The other proposal also involves increases in prices but would rely upon bank credit as the important meons of financing capital63/ The repayment of bank credit would be charged to enterprise costs of productionnus raising costs and prices. Most proposals along these lines involve extending the time period

* Tableollows on-


Table 10




aataAlurfii ff




bulldtDa mai4/



M failltr]

iM Otaaunl cat tona


aiclalUc liAiMry el

ftpaMftMli?.utninuvr trait),Uuiili leifrai IM HcarrUtftl ls lu=ir> braafcicw VjI

-tilctiMl affecl Uic riurtl eonrlualaa* cfMM*.

d. Plan for IVAat >aUan-ra*bUlc Jmlaaiciitm. tnar*

!. PUfl


and the size Of modernization loans, which the State Bank5 has been authorized to grant for periodsears and which arc paid out of profit deriving from modernization. In spite of much discussion in Soviet texts and journals, loans granted for thishave amounted tcillionillion rubles annuully, orercent of total

Both of these proposals would have the virtue ofplannersore realistic notion of the costs of investment by establishing more meaningful prices for capital goods. it must be remembered that prices do notetermining role in the distribution of resources in the USSR, and reform in the price structure would not in itself have any effect on the real volume of investment or consumption.

B. Defense

The explicit Defense budgetc1 billionexactly the same as9 plan allocation and remains at1 ednhovever,

should be considerably less than plannedesult of the January Supreme Soviet decision to reduce armed forces by one-third. In his speech proposing the armed forces cut, Premier Khrushchev estimated that the measure wouldaving ofillion toillion rubles It is unlikely thatarge saving will be realizedowever, since the reductions =nuy take as longears to complete.

The announced allocation for Defense represents the rubleof the Soviet Government for support of certain military programs. The Defense category is stated in Soviet textbooks to include "the monetary and material allowances for armed force personnel, payment for supplies and repair cf combat equipment, maintenance of military institutions and schools, military construction, and other expenditures included in the estimate of the Ministry of Defense of theihe total published figure for outlays, the only figureunderstates defense outlays in twoowever. First of all, many programs which come under the heading of national security outlays are known or are believed tc be excluded. For example,for Scientific research leading tc new weapons are included under the category Science (undernd some outlays forof new weapons and equipment may be included under the category Financing the National Economy. 1hus much of the expense connected with such programs as the developmentodern missile system or atomic energy may be excluded fron the explicit Defense budget. In addition, Information concerning the organization cf the Soviet atomic energy program indicates that, sincet least, Its activities

- y> -

have been subordinate to tbe Ministry of Hedlun Machinend therefore aost likely financed froa funds for Financing theEconomy, not Defense. Then, as noted (see A,,he Financing the Rational Econcay residuals contain large suns toprograms, possibly state material reserves, vhlch couldInclude sizable sums for military hardware. Finally, it must bc remembered that border guards come under the jurisdiction of security troops and are financed separately ln the budget (aee D, below).

The second sense in which tbe Defense budget may understate defense outlays lies ln the peculiarities of tbe Soviet pricing Defense industry, liie all Industry ln the USSR, operates on the principle of khozraschetthat la, it charges costs to revenue from the sale of product. Outlays for Investment and various operational expenses, however, arcarge extent covered by direct budget grant, with amortisation chargeo far below levela required to recover investment costs. uble figure relating to purchases ofgoods by the Ministry of Defense may understateignificant degree the actual value of the goods. Furthermore, the degree of understatement may vary froa time to time.

59 the USSR claimed to have cut its armed forcesk mill Ion6 million5 Nevertheless, economics due to reductions in force levels have been more than offset by Increasing allocationa forof weapons and supplies. In his proposal to reduce armed forces in the USSR by anillion men In January, Premier Khrushchev estimated that the saving from the moasure would amount toillion toillion rubles annually. This figurethat the cost per person ln uniform is equal to0 torubles per year. If the midpoint of thiss taken as the outlay per serviceman per year, and if the recent Khrushchev statements concerning troop strength are taken at face value, then it Is possible to calculate total personnel and nonper-sonnel outlay. Resulting personnel outlays59 thenrop fromillion tobillion rubles at the same time that nonpersonnel outlays Increased fromillion toubles. This calculation laough one, but nowhat assumptions are made concerning outlays per man per year the conclusion follows that the explicit Defense budget has by no means fallen proportioiatoly to the manpower cuts overeriod and that as manpower was cut other outlays increased.

Certainly it is difficult to draw any conclusions concerning either the size or tbe trend of the Soviet military effort on tbe basis of the Defense budget alone. For any realistic estimate of the size of the military effort in rubles, allowance must be made for the


various programs and charges that are omitted. For an assessment of the trend of military outlays, the stability of the explicit Defense category must be viewed in conjunction with other rapidly growing budget categorlea that may include military outlays (aeeoaP'espectively, above).

C. Social-Cultural Measures

1. Education

a. General

Outlays from the Soviet budget for education continue to increase moderately, with0 plan setillion rubles. The fastest growing item under the Education category is theto "scientific-researchhich has more than tripled5 (sec b, below). Outlays for higher education andtraining, planned1 billion rublesave remained fairly stablen the other hand, outlays for kindergartens, primary, and secondary schools have been increasing moderately,5 billion rubles5 to anillion rubles for Also included in the budget Education category are outlays for "cultural-education work" (used for propaganda and agitation) and sub-sidles to the press, theater, radio, and so forth (see.

The increase in outlays for general education will be used mainly to expand the kindergarten and boarding school systems. Expenditures also will be required to complete the transferear schools to fl-yoar Gchools and to provide greater facilities forwork ln secondary schools. The latter items were part of6 reorganisation of education.

The stability of outlays to maintain higher aodeducation facilities5atched by similarin enrollment in these institutions, at least for thehen figures are/ Analysis of more recent higher education statistics must take into accounteform, which requires students.who haveears of general schooling to workears before going on to higherestablishments. The reform, ostensibly aimed ottics between school and life" by providing young people withwork experience early ln life, may ot the 6ame time reduce the percentage of students going on to higher educational institutions. At any rate, there is no Indication of any general intent to expand higher educational facilities

Table ll follows on


Table 11

Soviet Budget Alloeatlooa for Education0 Plan

Billion Current Rubles

General education Kindergartens

Primary and secondary schools Other

Cultural-educational work Preparation of cadres

Higher educational establishmentsechnicums

Technical-professional training Other


rt, and radio Miscellaneous






in parentheses are estimates.

Uchebnoye ZavedenJye (VUZ)Institute of

Because of the absence of any kind of privatesystem in the USSR, expenditures from the state budget comprise most of total outlays for education except for organizational outlays, which8 billion rubles Most organizational funds are supplied by state enterpriseo; collective farm outlays are slight (tbe total social-cultural funds of collective farm funds wereillion rubles. Ill


b. Science

Outlays for Science, under the category Education, are planned06 billion rubles, an increaseoopered with9 expenditures andercent compared9 plan expenditures (actual outlays In this category are almost invariably higher than plan). The percentage increases0 are almost the same as those planned9 and continue the rapid rate of growth begun- utlays from the budget for Science increased by at leastercent annually, and7 they increased by more thanercent (seehe figure for actual budget outlays9 has not as yet beenbut it maylightly smaller increase, perhapsoercent.

These funds for Science, earmarked to "finance scientific-researchre used to support activities of the Academies of Sciences and of research Institutes connected with Gosplan, ministries, or councils of the national economy. Thesecarry on researchide variety of topics, from pedagogy and literature to physics and chemistry. Constructionew scientific center in Novosibirsk as well as expeditionswith the International Geophysical Year account for some of the Increase in funds for Science in recent years, lhe sharp riseowever, appears unduly large unless sizable sums to finance preliminary research connected with the rocket and earth satellite program are included. Such an assumption Is reinforced by the fact that, in spite of certain trends in recent years toward decentralization of financial activity, centralization has beenand even strengthened in the case of science. For example, the increase ln outlays for acientific research institutes has come about almost entirely on the account of budget funds and very little on the account or enterprise funds (see Moreover, of the oudget funds, the central All-Ur.lon budget provides the bulk of total funds for scientific researchercentfor educationhole, Ituch amallcrercent. iV

Precise conclusions concerning the outlays scries In Tablere made difficult because of an accounting shift whichtook place8 and which resultedodified outlay aeries first presented in9 budget report. Apparently the transfer of scientific research institutes froa industrial ministries toand the councils of the national economy resultedhift of

* Tableollows on p. UO.


Table 12

Financing of Scientific Research Institutes in the USSR a/

* (actual)







8 (actual)

(actual) b/

(Plan) b/

(actual) b/

(plan) b/

Billion Current Rubles





are more inclusive than earlier series and therefore are Theigures for total science outlaya areto be overstated byillionillioncompared with the earlier figures.

in parentheses are estimates.

expenditures for scientific research from enterprise costa ofto the budget category Social-Cultural The -eries of budget outlays and therefore total outlaysre estimated to be overstated byillionillion rubles compared with the earlier series on this account.

series of expenditures presented here does not represent the total scientific effort in the USSR. First of all, it

excludes significant sums for capital investment, which are provided by Then, considerable activity, particularly in the field of applied research and product development, either is financed from other budget categories, such as Financing the National Economy, or is charged to production costs of enterprises and organizations.mall amount of scientific activity carried out in higher educational institutions and universities is financed from funds to "finance higher educational establishments." Work done by higher educational establishments on contract for enterprises andwas planned0 million rubles

2. Health and Social Welfare

The allocation to Health and Physical Culturelanned5 billion rubles, continues to increase moderately (see These funds are used to build and operate hospitals, to provide emergency medical services in enterprises and ruralto collect blood, to support sanatoriums for tuberculosis patients and for children, to run nurseries and childrens homes, and the like. In addition to budget outlays for Health, there are also outlays for rest homes and sanatoriums under the budget outlay for Social7 billion rublesnd outlays byand6 billion rubles

The allocation for Social Welfare, including SocialSocial Insurance, and Aid to Mothers, ls set9 billion rublesoderate increase above9 planubles. Social Welfare outlays have approximately doubled since

(seehe bulk of the increase, however, occurredhen the full effect of the more liberal provisions under the

Pension Law was felt. Since that time, increases have been moderate,ercent annually.

Benefits under the social security system are available mainly to former servicemen (except officers, who are covered under the Defense budget) and to citizens who have performed special Social Insurance, on the other hand, covers workers andin state enterprises and organizations; it is administered by the trade unions;arge part of its outlays aro covered byfrom state enterprises (see III, D, below). 6 these revenues from state enterprises and organizations were sufficient to pay all Social Insurance outlays; however, because the rates ofdid not rise when benefits were increasedudget subsidies have been necessary ever since (amountingillion rubles6 andillionS). The size of these subsidies

Tabicollows on

probably will continue to lncreaae unless some basic revision of the rate structure is made.

Table 13

Outlays from the Soviet Budget for Social Welfare0 Plan

Billion Current Rublea


and Physical Culture




to work

and other services

to Mothers


D. Administration and Miscellaneous

1. Administration

Outlays for Administration havelight5 billion rubles,ercent of budget expenditures,5illion rubles,ercent of budget expenditures, in0 (seeppendix B,elow). During this period, there hasampaign to reduce administration staffs and to wipe out wasteful extravagance in public administration.

Outlays for Administration financed by the budgetsupport higher and local organs of state power; planning,and economic organs; ministries and departments; councils of the national economy; Judicial organs; and the


ll branch directorates of thef the national econcay have been supported not by budget allocations but rather by chargea to the cost of production (sebc-stolaoBt') of subordinate The Tadzhik Council of the national Econcay indopted the khozraschet method of financing, which means that the cost of its operations is covered by the profit of subordinate enterprises. Formerly it had operated an the basis of an nnnuni budget grantillion rubles. 8j/ If the Tadzhik experiment proves workable, it probably will beto other councils of the national economy.

2. Miscellaneous (Other)

Other expenditures Include the internal securityloan service to the population, allocations to long-termbanks, and minor miscellaneous items.

security outlays (including the MinistryAffairs and tlie Comadttec for State Security) are notfor any recent years. In tbes they were runningneighborhood ofillion rubles annually, but they haveby perhaps one-third in the more recent period. arnesties and reductions In forced labor personnel havethe role of the Ministry of Internal Affairs. In Januaryministry vas abolished on the All-Union level; this mayno moreransfer of financing from the central budgetrepublic budgets.

Service to the Population, conaisting ofprincipal retirement, and Interest payments, has constitutedaumoratorium on the state loan wasunder this category were givenillion rubles(secppendix B,elow) and probably haveon tbe same level since.

to long-term investment bankslatter with necessary monetary reserves for expansion ofoutlays run ln the neighborhoodillion toannually, 6 they were plannedillion rubles, fljt/)

budgets set aside Reserve Funds at thethe Council of Ministers of the USSR and of thebe used for contingencies. Those reserves, consisting ofas well as material reserves, are reclassified in actualthe categories for which they were expended. The size of


Reserve Funds has grown rapidly (it has approximately doubled sinceeaching the level6 billion rubles In recent years most of these funds have been directed to the categorythe National Economy. This seems in line with recent attempts to introduce greater flexibility in financial planning, allowing central authorities to set plan allocations at minimum levels and then use reserve funds in the course of the year as the need arises for them.

kk -

III. Revenues

The general level of budget revenues, planned9ay be seen in the chart, The largest Item of revenue, the turnover tax, is slated to decline0 because of adjustments in wholesale prices, but this decline will be more than offset byln profit taxes. The growth in the latter is made possible by the rapid growth of profits that has accompanied increasedand decreased costs ln the national economy. Turnover and profit taxes together account for two-thirds of total budget revenue.

Revenue from the population, which has been decliningill Increase only slightlyndercent of the total revenues will decline. This is in line with the current policy of fostering incentives by refraining from direct leviea on thereiving instead on indirect methods of raising revenues (pri-earily turnover tax and profit deductions). The latter have always been the major sources of revenue for the Soviet budget and willincreasingly so as direct taxes on the population- Other budget revenues (social insurance receipts, income taxes on organisations, income from foreign trade organizations, forest revenue, and the like) will Increase moderately.

Recent years haveeries of measures to modernize the tax procedures without any change ln the basic revenue structure. Minor revenue Items, which yielded small amounts of income at the cost of cumbersome calculation and collection procedures, have been modified or abolished. Moreover,ew procedure for collection of profits deductions has been established, the so-calledmethod of collection, direct from the enterprise. Demandsimilar reorganization of turnover tax collections have not as yet been fully Implemented.

A. Turnover Tax

The turnover tax, an excise tax levied on consumer goods, continues to contribute the largest single share of budget income.0 plan, however,light decline in the turnover tax, bothhare of budget income (from -i? percent planned8 to about hi percent plannednd in absolute termsrubles planned9illion rubles plunned

Changes Id the level of tax receipts reflect changes in the volume of trade, in the composition of trade, and In the level of

* Following.


prices, wholesale and retail. Table lb illustrates the relation between turnover tax and retail trade volume.

Table 14

Relation Between tbe Soviet Turnover Tax and Retail Trade

Billion Current Rubles


a Percent

Tax a/

Trade b/













ppendix B,elow.

on the basis of the average annual rate ofin the Sixth Five YearO).

The two sizable declines in the turnover tax6 actual compared6 plan and0 plan compared9 plan, were the direct result of adjustments in wholesale price levels with retail prices unchanged, following Increases in prices paid by state procurement agencies for agricultural produce. These price increases, bothndere Initially financed through grants by the budget to procurement organizations. Subsequently wholesale prices were adjusted upward, ending the needirect budget grant, but in the process turnover tax rates were decreased. The process may be seen In the following schematic representation;




Billion Rubles


illionBillion Rubles


Nominal Values



paid to farmer Wholesale trade costs



wholesale cost


Wholesale price

trade cost


retail price


6 budget was drawn up, final adjustments had been made for all commodities affected bygricultural price

increase except grain, whichbillion-ruble budget

grant. %/ The subsequent increase in wholesale prices for grainthe aecossity for the grant, resultingecline in Other

(unspecified) outlays under Financing the National Economy (seeecline ln turnover tax receipts (see Table

actual compared with plan.

Increases in wholesale prices, resulting froma agricultural prices, were not taken into account when9 budget was drawn up. Tbe budget law entrusted the Soviet of Ministers to correct the budget plan in accordance with new wholesale prices for grain products and mixed fodder, scheduled to go intoin Therefore, if complete data were availableoth budgei revenues froa the turnover tax and outlays for Price Differential Grants wouldrop compared with plan. The drop does show in0 turnover tux plan and ln0 budget allocatlona, although the latter was offset by other increasing(see II, A,bove).

The cost to the government of8 increase ln purchase prices in agriculture may be roughly estimated atillion toillion rubles. The decline ln the turnover tax was attributed by the Finance Minister to removal of the turnover tax on milk, to changei ic wholesale prices for grain products and sugar, and to lowering of

*bove. ** , above.

state retail prices for watches, bicycles, wine, and other goods. Since8 plan, turnover tax receipts have approximated to k6 percent of retail trade. Retail trade was plannedillion rublesnd turnover tax receipts should therefore have totaled 3U8 billionillion rubles. Tax receipts were in fact plannedillion rubles, however, and would haveillionthe retail price reductions (the latter were stated toaving to the publicillion rubles per Thus the effect of shifts in wholesale prices was to reduce tbe turnover tax by aboutillion toillion rubles. The estimate is consistent with the Khrushchev statement that outlays for agricultural price increases would be made within the financial framework of the no-loager-necessary KTS allocation (planned6 billion rubles It Is somewhat lower than thebiUion-ruble increase in revenues that collective farms were slated to receiveesult of the procurement price/

There has been virtually no information on turnover tax rates since World War II. It is known that, in the field of producer goods, the turnover tax is levied only on oil, gas, and electric energy (aod perhaps some scattered fabricated itemsor example, it wasintroduced for trucks In the field ofgoods, there is no tax on children's clothing, printed material, milk, and many types of meat, poultry, and On the other hand, the rate on alcoholic beverages has been significant 9J/ and also the rate on sugar. The only general statement pertaining to the distribution of turnover tax receipts refers to tbe7 when, it was observed, enterprises of the Ministry of Production of Food Goods accounted3 percent of tbe total, enterprises of the Ministry of Light Industryercent, aad organizations of the Ministry of Bread Productsercent.

There hasood deal of discussion about the payment of turnover taxes in recent years. Collection of the turnover tax at present is carried out roughlyercent on wholesale trade andercent directly from the industry or procurement agency. The notion became widespread, when the reorganization of industry occurredhat the turnover tax should be levied directly on theenterprise and not on the wholesale or retail tradehis, it was argued, would greatly simplify accounting bynified system possible, and it would strengthen financial control by concentrating collection from one type of organization (thefurthermore, theoretically, the turnover tax should befrom the sphere of formation. Nevertheless, although financial books and journals ever since have extolled the virtues of the system, the government has been understandably extremely cautious in making any radical change in turnover tax collections in view of theofteady flow of receipts to the budget.

- U8 -

It is often pointed out by Soviet writers that the turnover tux and profits really have the same economic naturehat Is, they represent part of the net product of socialist industry directed to general social needs. In sum, they represent the difference between cost and price. One economist therefore suggests combining the twoingle category called "deductions from the income of state Others are disturbed by present high profits in many branches of industry. ecent conference of financial workers proposed careful Study of the question ofurnover tax on some types of production of heavy industry where profits are This same group advocated use of more flexible turnover tax rates which, given generally stable prices, could be Increased as costs of production go down, thus guarding against abnormally high One writerimple criterionhe turnover tax should-be levied on any production whose profitability is higher than

One of the most radical reforms in the turnover tax Is the proposal of V. Nemchinov that the turnover tax be reduced by one-third and replacedtate rent tax (oblozheniye) levied on the basic fluid. In this way, he writes, every enterprise, in aperiod, must return to society sums borrowed from the national income fcr capital

The present turnover tax rates and methods of collection, which are the resultultitude of ad hoc decisions madeeriod of many years, arc badly ln needasic study and Indications are that some modifications will be made (for example, more widespread collection of the tax directly from However, the lackonsensus of opinion among financial writers on this subject, plus the reluctance of the government toadical step in this field, make it likely that any basicis far off in the future.

li. Profit Taxes

Profiteductions from profits" inapidly growing source of budget revenue, havinglo percent of budget revenue5 toercent ir.apid growth reflects the extremely rapid increase in profitshole and especially ir. industry (see Themajor wholesale price decreaseswith cost reductions

enerally expanding economy, has caused profits tc double during the period, 'lhe decentralized system of accounting of profit transfers also may have inflated the figures to sotr* extent, although the effect is not**

Tableollows on

Text continued on.

Table 15

Distribution and Disposition of Profits in the Soviet Nationalelected

Billion Current Rubles

state budget b/

working capital


state budget b/

working capital



state budget b/

working capital



Footnotes for Tableollow on



Bullion Current Rubies

and Communications

state budget b/


working capital



state budget b/

working capital






state budget b/

working capital


are somewhat less than those appearing in budget revenue tables (seeppendix 3,

elow) because the latter Include Some deductions from profits of the previous year a6 well as return of surplus working capital.


activity of union-republic Jurisdiction (motor and riverhich is listed

clear. Profit taxed,ercent of total profits, has decreased somewhatfromercent ln5 plan toercent ln0 plan- Thisorollary of the trend toward slightly greater emphasis on use of retained own funds rather than budget funds ln financing the economy.

Tne increase in profits0 in industry of almost Uorubles is somewhat higher than plans for higher Industrialand decreased costs would indicate. It may be assumed that, on account ofercent plan increase inhe profit level will also increase byercent, or aboutillion rubl6s. Savings because ofercent cost reduction in industry are planned atillion/ On these two accounts, the increase in profit totals aboutillion rubles, considerably lower than the UO billion rubles planned. Thissuggests either that the anticipated overfulfillment ofproduction is already built into the profit plans or that tbe most rapidly expanding areas of industry are also the most profitable.

Increasing profits in transport and communications may bemainly by railroad transport profits, which grew8 billion rubles65 billion/ Profit will most likely continue to increase in this sphere,0 reduction in railroad shipping costs planned/ The increase in profit in agriculture,illionillion rubles, isto understand, since profit in this sphere has always been low and profit plans underfUlfilled. Moreover, state farms have beenparticular difficulties since8 agricultural reform (sec II, A,,nd it is not likely that the RTS's make any large amount of profit. Profits in trade have been fairly stable or slightly rising Profits in the Other (unspecified)haveharp increase since7 Planfromillion rubles (including procurement)5 billion in0 plan. This has been an increase ofillionillion rubles annuallyomparable basis). This trend is thus parallel in direction to that observed in the residual of the category Financing the Rational Economy, although the degree of Increase here is by no means So striking.

Analysis of profit and profit tax figures Is complicated by certain difficulties in assessing the effect of recent organizational and accounting changes in the economy. The first of these goes backecentralized system of profit taxation was put Into effect for the Ministries of Automobile Building, Tractor and Agricultural Machinery, and Chemicals. According to this system, profit taxes were levied at the enterprise rather than at the trust


or ministerial level. 6 the aystem was expanded toeries of other ministries (Machine Building, Wocd and Paperand/ and since the reorganization of Industrial management int has become tbe dominant form. This system, which precludes netting of above-plan profits at intermediate levels, has resulted ln profit figures which are more "gross"that la, they include more profit of profitable enterprises and less deduction of

losses of losing enterprises. This involves, however, larger budget subsidies to enterprises with losses, which no longer can depend on

profits of profitable enterprises for aid (unless such aid Is in the


Perhaps more serious distortion in the profit figures,may be the result of the industrial reorganization itself. Whereas plan redistribution of profits formerly occurredertain branch of Induatryuch redistribution now takes placeiven territorial unit (council of the/ This cannot but affect profit figures as reported, but the exact effect and direction cannot be determined.

The problem of disposition of profit hasood deal of discussion ln the Soviet press. At present, profitoercent of/ The general tenor of the recent discussion isreater share of profit should he allowed to tbe branch of the economy itaelf for its own expansionmaller share channeled through the budget. Ase II, A, U,here is little correlation between the profit levelranch and itsrequirements. Therefore, internal branch financing of investment is dependentomprehensive revision of the price structure, which would provide for relatively higher prices for products of the more highly capital-intensive branches of the economy.

The role of toe profit plan, and of financial plans in general, is receiving heightened attention in recent years as problems of cost reduction and efficiency of operation have come to the fore. The major concern, historically centered upon tbe fulfillment of output plans regardless of cost, has now shifted to the question ofoutput plans at minimum cost. Various measures to perfectplanning may be cited. For example,ew planning indicatorutlays per ruble of productionas introduced. This Indicator, because it depends on tlie entire production mix of an enterprise, is core inclusive than the "cost for comparable production"which tz/ 9 abonus system for lal and engineer-technical personnel was put into effect.

wherein bonuses are contingent upon fulfillment and overfulfillment of cost reduction plans (assuming output and other goals are met) rather than upon overfulfillment of output/

Under these conditions, attention has been focused onof costs, prices, and profit levels. One problem has been the existence of increasingly large variations in enterprise profitith many enterprises operating on the basis of "plan-losses." apparently all branches of industry (except coal) are profitable, and profit in industryhole has increasedercent/ to more thanercent in9/ there exist increasingly large variations in profit levels. If5 theprofitability of most important branches of heavy Industry ranged fromercent, by the end8 the range had widened to/ Losses are common not only in the coal Industry but also in the mining of iron and manganese ore and ln some types of construction materials. On the other hand, profits are very high in machine building, oil, gas, and electric energy. Profit varies widely even within the same industry and area. For example. In the Sverdlovsk Council of the National Economy, according8 plan figures, the profit of ferrous metallurgy enterprises variedercent; of forestry and paper5; and of machine building/ In this connection tbe Budget Commission of the Soviet of the Union suggested that Gosplan USSR should look at the question of the expediency of introducingeneral successive review of wholesale prices for industrial production in order to establish the correct relation between prices and to completely abolish the losses of separate branches ofll1*/ eview might well result ln temporary readjustments of price levels. Any prospectignificant cut in wholesale prices such as05 cuts was soundly dismissed by Khrushchevpeech last/

Of course prices for goods can be reducedbut where then will we get funds for the further development of the economy? Will God send us new plants, factories, and electric power stations! If we reduce prices for goods without considering actual opportunities or raise wages without considering anything, will lt be possible to promote development of our economy? No, of course not. Then we would eat up all accumulation, would not get new accumulation.

A particularly vexing problem has centered on the properof price and profit levels for new products. In general, prices

* Profit rates in the USSR are always expressedercentage of production costs (sebcstolmost').

- 5'- -

are set at cost plus aprofit when the product is in series production. In the case of new products, however, temporary wholesale prices are fixederiodo lO monthsevel which allows covering full costs for "mastery of production" plusercent rate of profit. Therefore, although new goods are relatively higher priced than comparable older products, profit for new goods,is less than that for goods in production longer that havefrom cost decreases. Moreover, temporary wholesale prices are olten retained beyondmonth period, leading to huge profit. Accordingtate Planning Committee check of nine textile plantsnlyercent of the total volume of production wuS soldto permanent wholesale/ This is no doubt aacase, but the problem is very real. 0 decreeto machine building apparently adopted the suggestions of many Soviet writers that outlays for mastery of production be covered by deductions from all production of the enterprise or of the council of the national/ Temporary high prices for new products will then no longer be necessary.

C. Direct Revenue from the Population

1. Taxes on the Population

Taxes on theategory that includes income taxes, bachelor taxes, and the tax on agricultural households, has Been gradually increasing as incomes and numbers of workers have(see Nevertheless, direct personal taxes have neverajor source of budget revenue in the USSR, and their rate cf increase in recent years has been less than that of the more

orn r. Xci nrofit drduc', linc in revenue resulting from abolition of the income tax overeriod will be more than effset by rapid increases infrom indirect taxes (turnover tax and profit transfers). The Khrushchev regime thus is continuing its policy of raising living standards primarily by increasing incomes in contrast to its earlier policy Of reducing prices (the latter policy reduces turnover taxes and/or profits), 'lhe Khrushchev policy, by allowing the regime to raise Incomes of selected groups ir. particular periods, is moreand, it is believed, can be more readily manipulated to maximize incentive effects.

lhe income tax will be abolished, according to the law adopted at the May session of tne Supreme Soviet, in stages beginning iclien all taxes on incomesublea per month will be discontinued and tux rates on earningsubles

Tableellows on


Table 16

Soviet Revenue from the Population

Billion Current Rubles




on the population

tax Bachelor tax Agricultural tax














percent internal)






Seeppendix B,elow, and source Totals are derived independently from un-rounded data and do cot always agree with the sua of their rounded components, b. Figures in parentheses are estimates.


will be reduced on the average of to percent. Similar animalwill be made on progressively higher income groups until, lnhe tax on all incomesubles per month (approximately tbe planned average wage in that year) will be abolished. At the same time, taxes on incomesubles will be abolished, but individuals in these groups will suffer pay cuts ofoercent of the abolished tax. Forercent of the labor force earningubles per monthages will beby the exact amount of the abolished tax, so that take-home pay will remain unchanged. Thus the measure is in line with general attempts to reduce excessive gaps ln wages between various categories of/

The income tax ln the USSR Is paidrogressive rate schedule, depending on the amount and source of Income. eries of measures have reduced tax rates somewhat in recent years. Ashose earningubles per month were exempted from paying taxes, and in March the tax rates for those earningubles monthly were reduced. At present the worker earning the minimum taxable1 rubles per month)axercent of his wage, the worker earning the average0 rubles per month)ercent, and the academicianubles per month)ax at the rate ofercent. If there are more than three dependents, the tax is reduced by 30 For any private incomeor example, from the private practice of doctors, lawyers, or other professionalshe rates varyercentonthly incomeubles) toercentonthly income/

The income tax on workers and employees accounts for by far the largest share of taxes on the population (nee. The bachelor tax formerly provided that individuals with no childrenonthly feeercent of wageo and thoBe with one or two1ercent, respectively. Asll wage earners with children and single women were free from paying the/ These taxes also will be completely abolished

The tax on agricultural households is based on the size of the private plot availableousehold. The rates vary by localitythe average rate in the RSFSRublesalthough it varieson Latvia and Estonia Itubles, aal In Uzbek SSR and Tadzhik SSR it isubles for irrigated landubles for nonirrigated/ This tax will not be abolished, because, according to Khrushchev, "itertain role in the strengthening of labor discipline on collective farms and regulating collective farmers' incomes from private/


2. State Loans

Revenues to the budget from state loans have decreased considerably, mainly because of the abolitionfmass subscription loans. These loans, introduced during the war, amountedeeks' wages and were listed as budget Although the loans were providing large sums of Income,from the budget as Interest and repayment on the loans were growing rapidly and the net gain to the budget was decreasing. In7 plan, gross loan receipts were planned6 billion rubles, but outlays for loan service were planned9 billion rubles,et gain of onlyillion rubles. Since then, repayment of the old debt has been suspended by tbe government, and loan subscriptions by the population are limited to theercent Internal loan. The latterillion to 2rubles annually.

Beginningeveral republics instituted "money-goods" lotteriesartial substitute for tbe compulsory loans. Incomes from this source are minor, amountingillion to 2rubles at most.

Soviet budget accounting includes increases in savings banks deposits, which are invested in government bonds, as budget revenue. Increases in savings deposits have been difficult to plan and have fluctuated rather widely (sec

D. Social Insurance Receipts

Social insurance receipts, which1 billion rublesonsist of payments to the budget by state enterprises,ixed percentage of their wage bill. This percentage varies/ depending on the degree of hazard of the workfor example, in the coal industry the rateercent, and forand procurement it/ These funds are used for pensions, sickness benefits, pioneer camps, childrens sanatoriums, and the like.

The Social Insurance budget is an Independent unit,by the trade unions, but its income and expenditures areInto the state budget. Since passage of6 pension law, however, receipts (mainly from enterprise deductions) have not been sufficient to cover outlays, and general budget funds have been made available for these outlays (see II, C, above).

- bove.


E. Income Taxes on Enterprises and Cr^anizai-ioas

Income taxes, paid by collective farms and producer andcooperatives, haveercent of budget revenue overlan period. This category previously included the Tax on Noncommodityax levied on services analogous to the turnover tax, which was abolished in/ This taxegligible source of income (plannedillion rubles/

Of3 billion rubles of total income tax onplannedt may be assumed, on the basis of9 plan, that collective farms will be responsible for about two-thirds.ollective farm income tax was paid according to aschedule which set different tax rates for different types of incomefor example, produce used for productive needs was taxed atercent, whereas produce sold on the collective farm market was taxed atercent. The changed collective farm tax which went Into effect8 excluded from taxable income manyoutlays formerly included and alsoingle tax rate of Ik percent. Beginning with the income received by collective farmshe year prices were considerably raised, the tax rate was reduced5 percent. In spite of the reduced rates, hovever, collective farm income taxes went upillion rubles in6 Plan3 billion rubles in9/

Consumer cooperatives payercent of their profit lntaxes to the budget. For producer cooperatives the rates vary fromercent on theercent Of profit toercent for profit aboveercent (the profit being calculatedercent ofrut in recent years the average rate has approximated/

;'. Miscellaneous Revenues

Before their abolitionTS's paid their revenue into the budget. Tne successor RTS's are khozraschet enterprises and pay into the budget only slight profit taxes" (Fora discussion of the effect of8 agriculture reform on the budget, see II, A,, above.)

Other revenues, fairly stable5 and8 plan, jumped rather sharplyS and have beer, increasing moderately ever since. Includedariety of items, such as those discussed below.

Local taxes andather small source of budget revenue ln the9 billion rubles5illion rubles/ "ill be even smaller in the future. Asnterprises were freed from tho payment of the tax onand land rent. Since these two taxes accounted for approximatelyercent of total local taxes and fees, and since enterprises paidercent of the construction tax andercent of the land rent, remaining local taxes, consisting of payments by tbe population, will be slight. Removal of this tax will not affect budget revenues,it will be offset by increased profit/ Payments by the population under this category consist of fees on private homes, fees on private plots if they are not used for production, fees for the ownership of means of transport and cattle, and various market fees. Related to local taxes and fees Is the entertainment tax, whichillion rubleshe latest available/

Collections and various nontax revenues includefrom the sale of state property, repayment of credits extended by the USSR to foreign states, payments of various fines byand income of setae gross budgetary organizations (for example, planning organizations until their transfer to khozraschetr housing in isolated areas which is financed directly out of the budget). The size of this category has not been knownhen it3 billion/ Receipts from the sale ofillion rubles plannedresumably fall under this

3- Customs and receipts from foreign trade operations encompass income traditionally considered as customs revenues as well as revenues resulting from the operations of importwhich pay excess revenues into the budget. Ijgtf The size of this item is not known, but it is probably at least as large as grants to export organizations, which operateoss (see II, A,, above).

4. Miscellaneous revenues include minor items such as forest revenue (plannedillion rubles/ That sale of materials included as State Material Reserves is alsoincluded here. In the past, revenues from Price Differentials have been included as budget revenuefor example, receipts for differences in the price of cattle were an income item/ Sometimes incomes from the revaluation of inventoriesesult of price increases arc listed as budget revenues; it is more likely, however, that such revenues arc related to the surplus and the budget account in the State/


G. Budget Surplus

The Soviet budget has consistentlyurplus ofover expenditures (except for the waxnd in89 the actual surplus was signlflcantly higher than planned. This surplus serves to increase the credit reserves of both the long-term and the short-term banks.

The exact relation between the budget surplus and theof credit is difficult to determine. It has been recognized that in general the budget surpluseflationary effect on the economy, offsetting the inflationary effect of the State Bank extension of/ It has never been clear, however, what correlationthe two tbe Soviet planners seek to achieve. There are two distinct areas of money circulation in the USSRthe area ofhich relates mainly to incomes and outlays of the population, and the area of enterprises accounting, which involves bookkeepingrather than transfers of funds. To determine deflationary and inflationary effects on the economy, therefore, it would be necessary to consider these two areaB separately and to distinguish, in the budget, those revenues and expenditures that are cash (such asfrom taxes on the population or expenditures on pensions and grants) from those that concern enterprise accountB (such as profit taxes). Similarly, in State Bank credit it would be necessary to determine how much expansion of credit ultimately shows up in the wage fund and thus io the cash Income of the population and how much leads to purchase of materials and thus appears ln enterprise accounts.

A comparison of the budget surplus and State Bank credit may be seen in In the, budget surpluses in general were greater than expansions in State Bank credit;owever, the trend has been reversed because of the great expansion cf State Bank credit.

Tabic 17

Soviet Budget Surplus and Extension of State Bankeriod



or Stole

l'i wiil'j'J, Aj'jit.iil^ est*<timely, belov.




The share of total budget funds channeled through republic and local budgets will Increase toercent in0 plan, compared withercent in9 plan. This increase may be explained by the fact that republic budgets now will include outlays for higher educational establishments, technical and professional schools, and

aid to mothers.

The share of expenditures passing through republic and localhas been increasing everarge nuaber ofagricultural, construction, trade, and other organizations were transferred from union control to republic/ This trend was furthered by7 regionalizatlon of industry, which put the bulk of industry under the jurisdiction of the councils of tbe national economy; the latter are under republic control. In& plan,ercent of outlays to the category Industry andercent ofto the category Financing the National Economy Id general went through republic budgets. Since then, however, republic budgetfor Financing the National Economy have been growing less rapidly than All-Union outlays, and their share in total Financing the National Economy has fallen fromercent8 toercent in90 plans.

Republic budgets for9 plan aad0 plan are listed in* The budget of the RSFSR accounts for, by far, theshare of total republicnd the threerepublicsthe RSFSR, the Ukraine, and Kazakhstanogether account forercent of the total. Although In general the republic budgets ore balanced, republics being allowed to retain enough general government revenue to caver expenditures, tbe Kazakh republic, lor the third consecutive year, willubsidy from the All-Union budget. Even though it is the only republic allowed to retain all the turnover tax collected oo its territory, Kazakhstan willtate subsidyillion rubles0 in order to carry out measures "projected in the plan for the development of the notional economy" Similarly, it was planned torantillion rubles9illion rubles

Outlays of union-republic and local budgets are used to finance industry that is under tbe control of the councils of the national

* Tableollows on p.


Table 18

State Budgets of tbe Union-Republics of tho90 Plane

















are derived Independently fromand do not always agree with the sun ofcomponents.

economy and union-republic or republic ministries, local industry, the MTS-RTS'e, state faros, internal trade and municipal enterprises, automobile and river transport, kindergartens, primary and secondary schools, higher educational establishments, some Institutes, libraries, museums, and local administration. Financed under the All-Union budget are outlays for defense, railroad, sea and air transport, foreign trade industry that is under All-Union Jurisdiction, the Academy of Sciences, major scientific research institutes, military pensions, and other items of All-Union significance.

Republic outlays are coveredortion of the state revenueon republic territory that republics are allowed to retain. In0 budget, republics retain all income from the bachelor tax, the collective Tuns Income tax, the agricultural tax, forest revenue, and


ercent of income taxes and state loan revenue. In the case of profit deductions, enterprises subordinate to republics pay their profit deductions to the republic, except thatercent of plan profit of enterprises under the councils of the national ecoeoay goes into the All-Union budget. For the turnover tax the share retained varies by republics and by year and la fixed Id the annual budget lav. Thia is the flexible item, which enables republic budgets to balance exactly (the entire surplus occurs in the All-Union budget). In0 plan, for example, the share of the turnover tax retained by the republic variesercent ln Latviaercent lnwith the RSFSR percent fixed

The treod toward larger union-republic budgets has beenby some expansion of the fiscal privileges of the republics. For example,6 the Supreme Soviet approves the state budget for the Individual union-republicshole, without specifying the size of local budgets; the latter are determined subsequently by the Supreme Soviets of the corresponding republics. Moreover,epublios have been allowed to retain for their own disposition any surplua funds resulting from overfulfillment of their plan Income or economies In plan expenditures.

Present budget rights and procedures are based on legislation dating back toeriod that has lost most of iteunder present conditions. As part of the current search for more legality ln the USSR, attentioneing given to modernization of the budget law. The first step in this direction was the law passed by the October Supreme Soviet "Or. the Budget Rights of the USSR and of the Union-Republics." Provisions of tbe lav are stated ln extremely general terms and presumably will be made more specific by subsequent Ministry of Finance regulations. The law provides that the State Budget, drawn up by the Ministry of Finance, USSR, on tha basts of drafts of union-republic state budgets, the trade union socialbudget, and financial plans und eatlmatea of the ministries and agencies of the USSR, shall be presented to the Council ofUSSR, which then shall submit the plan budget in generalto the Supreme Soviet of the USSR. After analysis by the Budget Commissions of the Soviet of the Union and the Soviet ofthe Supreme Soviet discusses aad approves the budget, but only by broad category. On the expenditure side it fixes outlays to Financing the National Economy, Social-Cultural Measures, Defense, and Administration; it fixes the size of the All-Uolon budget and the union-republic state budgets (ln total income and outlay by republic) and the size of allocations from All-Unicn taxes and reve-

Hiis law ls no moreirst stepeneral review of All-union and union-republic budget legislation. For example, according to one Soviet writer, questions of fulfillment of the state budget are still regulated on the basis of principles laid downnd it is difficult toingle article that has not partly or completely lost its meaning. IU3/ The same author wonders why All-unionshould determine the rights of union-republics, since republics themselves establish the direction and the level of allocations in their budget.

There will probably be further clarification of the budget rights and procedures ln the union-republics as the quest for legality in the USSR continues. Whether this vill resultlarification of budget procedures concerning All-Union outlays, which finance the more Important measures, is more doubtful.



I 1





E t


E Ei



Eles El?


! K



?t Iff Ee

elllEsF ta le




A.G. "Gosudarstvennyy byudzhet zaverahayushchego

goda pyatoy pyatiletki" (The State Budget for tbe Concluding Year of tbe Fifth Five Yearlanovoye khozyaystvo, no (hereafter referred to as Zverev, Planovoye khozyaystvo, no

. "Gosudarstvennyy byudzhet SSSR8 godu" (The State Budget of the USSR, Planovoye khozyaystvo. (hereafter referred to as Zverev. Planovoye khozyayiitvo,

. Gosudarstvennyy byudzhet pervogo goda semiletki" (The State Budget in tbe First Tear of th* Seven Year'lar.ovoye khozyaystvo, no- 5- (hereafter referred to as Zverev. Planovoye khozyaystvo, no

. "Byudzhet oovogo pod^yemaul'tury atrany"udgetev Rise in Economics and Culture of thelanovoye khozyaystvo,- 8. referred to as Garbuzov. Planovoye khozyaystvo,

A. "Gooudarstvennyy byudzhet SSSR6 godu (The

State Budget of the USSB, Planovoye khozyaystvo, no (hereafter referred to no Zverev. i'lujiovoyc klioEynyEtvo, noverev, A. Gosudarstvennyy byudzhet vtorogo goda shestoy pyatiletkl" (The State Budget ln the Second Year cf the Sixth Five Yearlanovoye kbozyaystvo, no 3,hereafter referred to as Zvorcv. Planovoyeo

dannyye" (Statisticalinansy 1

sotslalistieheskoye stroitel' stvo,burcafter rr-ffrred to as Statistlcheskiye. UN. Montbly Bulletin of Statistics,

Tsentral'noye Statistichcskoye Upravleniye. c

8 godu (The National Economy of the RSFSR- (hereafter referred to uit Harkhczaya Roaslya,5

. ilnnlrovfinlye zhl 1'shchao-kogEuiial'noso khpzyavstva

(Planning the rkwsing-Coemiuaal Economy J,b',id,

Ministerstvo Finansov. yatoy pyatlletke (St:ite Budgets ofin the Fifth Five Year



(hereafter referred to as Gosudarstvennyye byudzhety

aoyuznykhyatoy pyat'lletke) Narkhozbove).

Sovetskayu Rossiya,975

Garbuzov. Pianovoye khozyaystvo,9 (l, above).

USSR, Teentral'noye Statleticheskoyc Upravleniye. Ka.rodr.oye

khozyaystvo8 godu (The National Economy of the USSR,. ^Sk. (hereafter referred to as

Verkhovnyy Sovet SSSR.

Gtenograflcheskly otchettenographic,hereafter referred to as

USSR, Verkhovnyy Sovet SSSR. tenograficheskiy otchettenographic,hereafter referred to as Zasedaniya,

USSR, Verkhovnyy Sovet SSSR. tenograficheskiy otchettenographic. (hereafter referred to as

USSR, Verkhovnyy Sovet SSSR. -tenograficheskiy otchettenographichereafter referred to as


nd Slavnyy, I. Sovetsklyeyatoy pyatUotka (Soviet Finances in the Fifth Five Year (hereafter referred to as Kisman. Sovetsklye finansy)

Zverev. Pianovoye khozyaystvo, no9 (L, above).

- "Voprosyrcditovaniya

sel'skogoovykh usloviyakh" (Problems of Financing and Crediting of Agriculture in the Newinansy SSSR, no (hereafter referred to as Garbuzov. Finansy SSSR, no

S. "Dolgosrochnyyegoozda.nli

osnovnykh fondov kolkhozov" (Long-Term Credit and Itsin the Creation of the Collective Farm Basicovkhozakh, no , above).

Garbuzov. Finansy SSSR, no9 (U,




16. .

Gatovskiy, L. "Nekotoryye voprosy razvitiya politicheskoy

ekonooli sotsializma" (Some Questions of the Development of

the Political Economy ofoprosy ekonomiki,

redit, no. Zverev, A. Khozyaystvcnnoyecmiletke

(Economic Development and Finances ia the Seven Year Plan),

Pravda.- 7

Garbuzov. Finansy SSSR, no9 {H>

Semenov, V. "Razrevshiye voprosy finansirovaniya sovkhozov"

(Imminent Questions of Financing Stateinansy SSSR, no.


Gosudarstvennyye byudzhety soyuznykhyatoy

SSR, Ministerstvo Finansov. Raskhody na sotsial'no-kulturnyyc meropriyatiya go gosudarstvennomu byudzhetu SSSR (Outlays for Social-Cultural Measures by the State Budget of the (hereafter referred to as Raskhody na sotslal'no-kulturnyye meroprlyatlya)

Verkhovnyy Sovet.

stenograficheskiy otchettenographic. referred to as


"Statisticheskiye dannyye"bove).

, above).


Zverev. Pianovoye khozyaystvo,7 (l,

o. 6.

Korovushkin, A. "Vazhnyye zadachi bankov dolgosrochnykh viozheeiy" (Important Tasks of the Long-Term Investmentinansy SSSR, no (hereafter referred to as Korovushkin. Flpansy SSSR, no

USSR, Tsentral'noye StatiSticheskoye Upravleniye. 9 godu (The USSR in,7

Pianovoye khozyaystvo,o. 6.


33. .. Ibid.

P. nansirovaniya remonta

1 modern!zatcil osnovnykh fondov" (Amortization and Questions of Financing Repair and Modernization of the Basicoprosy ekonomiki, no.


,2tenograficheskiy otchet

Zverev. Planovoyeobove J, P-arbuzov. Planovoye khozyavBtyo,, above) Usatov, I. "Vazhnoye ueloviye ukrepleniya khozrascheta


Sverev. Planovoye khozyaystvo,


aatov, x. uxvi*jf

(Important Condition for Strengthening Khozraschet),no. ar v

Zverev. Planovoye khozyaystvo, nobovej,. . Voprosy natslonal'nogoinansov SSSR (Problems of National Income and Finances of the. (hereafter referred to as Zverev. Voprosy natsional'nogo Zverev. iaanovoyc khozyaystvo, noi3-

kk. Zverev, A. "Raboty finansovykh organovoa uroven novykh zadach" (The Work of Financial Organsof the level of Newinansy SSSR, no- 6. (hereafter referred to as Zverev. Finansy SSSR, no

Zverev. Voprosy nat signal'nogo dokhoda (kl,. Zverev. Planovoye khozyaystvo, no

. "Reorganizatsiya MTS, novyy poryadokadach1 finansovykh organov" (Reorganization of the MTShe New Procedure fornd Tasks of the Financialinansy SSSR, no (hereafter referred to aa Carbuzov. Finansy SSSR, noverev. Voprosy catsioaol'nofto dokhoda (kl,

kl. Koodrashev, . romyshlennosti SSSR

(Price Formation in Soviet IndustryJ,hereafter referred to as Kondrashev. Taenoobrazovani ye) Turetskiy, Sh. Ya. Ocherki planovogoSSR (Outlines of Planned Price Formation in the. (hereafter referred to as Turetskiy. Ocherki)

lu3. nd Sawin, B. "Neznvershennoye stroltel'stvo 1

put! yego eokrashcheniya" (Uncompleted Construction and Ways of Lesseninginansy SSSR, no.



"Sbomik postanovleniynstruktaly po finanaovo-

khozyaystvennira voprosem" (Collection of Resolutions, Orders, and Instructions on Financial-Economico IX,.

A.V. (ed) redit. SSSR (Finance and Credit

in the. (hereafter referred to as Bachurin. Finansy)

Alec, and Zauberman, Alfred. oviet Disclosure of

Ruble Nationaloviet Studies, vol II, no.

M.Z. Salens narodnoeo khozyaystva SSSR (The Balance of

the National Economy of the

V.I. lanirovaniye samoleto-

stroltel'nogo predprlyatlya (Organization andn Aircraft,

Turetskiy. ,.

Rotshteyn, A. Flnanspvoyeovnarkhozakh

(Financial Planning in the.. Finansy SSSR (Soviet.

t al. redit SSSR (Finance and

Credit in the USSRT7- (hereafterto as Dymshits. redit SSSR)

Bachurin. , Zverev. Finansy SSSR, Co,

Zverev. Pianovoye khozyaystvo, nobove).

Dzbsparidze, V. is'iaa" (Notes and Letters),

Voprosy ekonomiki, no..

nauchnoy konferentsii po voprosam flnansov

ovykh usloviyakh upravleniya khozyaystvom" (Proposals of the Scientificon Questions of Finance of Industry and Cor.struction in the New Condition of Management of theinaQSOvoyetroltel'stve (Financial Planning in Industry and.. (hereafter referred to as "Predlozhenlya nauchnoy konferentsii")

D. EkonomlchesKoye soderzhaniyc raskhodov

sovetskogo byudzheta (Economic Contents of Soviet 3udgettroltel'naya gazeta,

Voprosy natslonal'nogo,. Pianovoye khozyaystvo, no

Korovushkin. Finansy SSSR, no, above).


nd Levchuk, I. redltovanll

kapitalovlozheaiy" (On the Question of Crediting Capitaloprosy ekonomiki, no

67- Dymshits. redit,-

Arnold. Atcgaic Energy in the Soviet Union, Stanford,




, .

73- Ekonomika ael'skogo khozyaystva, no. Raskhody na sotsial'no-kulturoyye,

75- Raskhody na sotslal'no-kultumyye,

USSR, Verkhovnyy Sovet SSSR. tenograficheskiy otchet, Stenographic,2,,,9 Solov'ev, V. "Ekonomicheskiy analiz raskhodov na sotsial'no-kul'turnyye meropriyatiya" (Economic Analysis of Outlays for Social-Culturalinansy SSSR, no Zverev. Voprosy natsional'nogo,

79- ,.


nd. (ed) Finansy SSSR


A.V. "Zadachi dal'aeyshego sovershenstvovaniya

opravlenlya promyshlennost"yu" (Tasks in the Furtherof the Administration ofestnlkauk SSSR. no.

,, above).


Kondrashev. ,

C, above) .

1 Jul 7


90. Garbuzov. Finansy SSSR, no, Kantor, L. "Nekotoryye voprosy planirovaniya optovykh tsen" (Some Questions of Planning Wholesaleinansy SSSR, no

,an yd.

94. Uryupin, R. latel'shchikakhborota i

otchisleniy ot pribyli" (On Payers of the Turnover Tax and Profitinansy SSSR, no-

95- Ibid.


"Predlozhenlya naucbnoy, above).

G. tavkakhborota" (On Turnover

Taxinansy SSSR. no Nemchinov, V. "Nekotoryye problemy planirovaniya narodnogo

khozyaystva" (Some Problems of Planning the Nationalocmunist. no.

Planovoye khozyaystvo, no5 (l,o

, above).

Zverev. Voprosy natslonal'nogo,-

Garbuzov. Planovoye khozyaystvo,9 (l,. 6.

, above).

nd Tyumin, S. "Sokrashcheniye ubytochnosti

predpriyatiyeserv povysheniya nakopleniy" (Decreasing the Losses of Enterprisesa Reserve for RaisingFinansy .SSSR,- (hereafter referred to as Olekminskiy. Finansy SSSR,- Gudok,



Chyc rnomar. IQJozy ayaschet na zheloznykh dorogakh SSSR (Cost Accounting on Soviet.

, above).

Zverev. Planovoyeo

Lavrov, V. Voprosy organ!zatsi1ukhgalterskogcovnarkhozakh (Problems' of Organization of Finance and Accounting ln

. SSR (Finance and Credit in the (hereafter referred to as Plotnikov. SSR)

K. okazatelyakh sebestolmosti produktsll

i lspol*zovaniyaborotnykh fondov" (On Indexes cf Cost of Production and Use of the Basic und Revolvinginansy SSSR,.

si al ls:.icheskiy tr^d,


verev. Planovoye khozyaystvo. no. Olekmlnakly. EaSgj SSSR.

A. 'Problesy rentabel'aosti pronyshlennykh

predpriyatiy" (Probleas of the Profitability of Industrialoprosy ekorioaikl.. 71 8k.


llk- ,-




New York Tines...

Mar'yakhin, C, and Bumlstrov, D. HaloglTaxes on the Population in tho

. (ed) Spravochnik naloKovogo rabotnika (Handbook for the Tax. (hereafter referred to as Babushkin. Spravochnik)


Babushkin. .

12k. Plotnikov. - . SSR (Social Insurance in the.


Zverev. Flnaasy SSSR, no7 (kk, above).

Suchkov, A. Dokhodyyudzhcta SSSR

(Revenues of the State Budget of the.

USSR, Verkhovnyy Sovet. Vedomostl vcrkhovnoeo soveta SSSR,


o- Zverov. Finansy SSSR, no7 (kk, above).

nd Shirkevlch, H. eotnykh

borakh" (On the Question of Local Taxes andinansy SSSR. no.

Buralotrov, D. "He oslablyat'boruto Weaken Attention to Collection of Taxes),no

byudzhety soyuznykhyatoy

.- Kiaoan. Sovetskiye,. t al. Pravovyye voprosy vncahncy torgovll

evropeysklsil stranami. narjdnoy dcnokratly (Legal

Questions of Foreign Trade of the USSR With the Peoples




. Organlzats1ya rinansovogoistema

zagotokot (Organization of the financial Economy Id the Cattle Procurement- -

Powell, Raymond P. "Soviet Monetaryh.D. Thesis,

University of- KlBBan. Sovetsklye,ho. Atlas, M. Razvitiye gosudarstvcnnogo banka SSSR (Development of the Soviet State.redit. no. 7.

Garbuzov. Planovoye khozyaystvo,9 (l,.

ihl. Sosnovskly, V. "Hovyy poryadokinanairo-

vaniya khozyaystva soyuznykhadachi finansovykh organov" (The Hew Procedure for Planning and Financing the Union-Republic Economies and Tasks of Financialinansy SSSR, no

, above).

Nekotoryye voprosy byudzhetnogo zakonodatel'stva"

(SoiM! Problems of Budgetinansy SSSR, no.

. "Statlsticheskiye, above).

Zverev. Planovoye khozyaystvo, no-

"Statioticfaeskiye dannyye", above).

Zverev. Finansy SS&i, no,. 5.

"Finanaovuya otatistika" (Financialinansy SSSR,

no* (hereafter referred to as "Flnansovaya statistlka")

Zverov. Voprosy natslonal'nogo.

7 HO, above).


, above).

,- Ibid.

Garbuzov. Planovoye khozyaystvo,l,. - , above).

Zverev. r^vnye khoEYaystvo, nobove).

Zverev. Finansy SSSR, no.. .


2,verev. Finansy SSSR,. 5-

"Finansovaya statistika"bove).

,Statistichcfklye dannyye"


, above).

,Statisticheskiye materialy" (statistical Hatorials),

Vestk etatlstikl, no

, above).


Original document.

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