{"title":"Cross-Sectoral Transfer of Budgetary Subsidies Through Differential Railway Tariffs","authors":"Ivan A. Khomutov","doi":"10.18288/1994-5124-2023-4-6-35","DOIUrl":null,"url":null,"abstract":"The paper exposes and analyses a serious flaw in Russia’s current rail freight tariffs. Subsidized sectors of the Russian economy are overcharged while a range of other sectors are undercharged. This transfers budgetary subsidies from one sector to another in a way that is opaque to regulators. The article details how this transit subsidy is part of conveyer belt that runs from the national budget to refining, rail transport and ultimately to coal mining. Analysis shows that the transit subsidies from differential railway tariffs are quite large (from 2019 to 2021 coal industry revenues were augmented by an annual average of RUB 270 billion through this technique). The article also demonstrates that subsidizing coal production through differential railway tariffs cannot be justified by rational economic considerations, as it only prolongs the life of many hopelessly unprofitable enterprises and thus hinders sustainable economic development in coal-mining regions. The paper studies the feasibility of eliminating this kind of subsidy by making tariffs for oil and coal transportation converge. If those subsidies had been eliminated in 2023, the author concludes that it would have been relatively painless for the industry and could potentially bring about a RUB 245 billion reduction in annual state budget subsidies by 2050. The funds saved could be redirected to economic diversification and social development in the regions where the coal industry is concentrated.","PeriodicalId":43996,"journal":{"name":"Ekonomicheskaya politika","volume":null,"pages":null},"PeriodicalIF":0.4000,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Ekonomicheskaya politika","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.18288/1994-5124-2023-4-6-35","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
The paper exposes and analyses a serious flaw in Russia’s current rail freight tariffs. Subsidized sectors of the Russian economy are overcharged while a range of other sectors are undercharged. This transfers budgetary subsidies from one sector to another in a way that is opaque to regulators. The article details how this transit subsidy is part of conveyer belt that runs from the national budget to refining, rail transport and ultimately to coal mining. Analysis shows that the transit subsidies from differential railway tariffs are quite large (from 2019 to 2021 coal industry revenues were augmented by an annual average of RUB 270 billion through this technique). The article also demonstrates that subsidizing coal production through differential railway tariffs cannot be justified by rational economic considerations, as it only prolongs the life of many hopelessly unprofitable enterprises and thus hinders sustainable economic development in coal-mining regions. The paper studies the feasibility of eliminating this kind of subsidy by making tariffs for oil and coal transportation converge. If those subsidies had been eliminated in 2023, the author concludes that it would have been relatively painless for the industry and could potentially bring about a RUB 245 billion reduction in annual state budget subsidies by 2050. The funds saved could be redirected to economic diversification and social development in the regions where the coal industry is concentrated.
期刊介绍:
Ekonomicheskaya Politika is a broad-range economic journal devoted primarily to the study of the economic policy of present-day Russia as well as global economic problems. The subject matters of articles includes macroeconomic, fiscal, monetary, industrial, social, regulation and competition policyand more. The journal also publishes theoretical papers in such areas as political economy, general economic theory, welfare economics, law and economics,and institutional economics.. The character and the scope of economic problems studied in many publications require a multidisciplinary approach, consistent with the editorial policy of the journal. While the thematic scope of articles is generally related to Russia, the aim of editorial policy is to cover politico-economic processes in the modern world and international economic relations, as well. In addition, Ekonomicheskaya Politika publishes Russian translations of classical and significant modern works of foreign economists.