Loans for India to buy Russian equipment: Putin

November 20th, 2008 - 7:40 pm ICT by IANS  

Moscow, Nov 20 (RIA Novosti) Russia would advance loans to India and China for purchase of Russian equipment that would generate more jobs in the country as part of the government’s strategy to tackle the economic slowdown and market crisis.Prime Minister Vladimir Putin, who was addressing a congress of the pro-Kremlin United Russia party Thursday, outlined a number of other proposals which included tax cut and government guarantee to all savers to boost market liquidity.

Putin told the party he has been heading since he stepped down as president last May that the government would allocate over 50 billion rubles ($2 billion) to support and protect the defence sector from bankruptcy.

“We will also issue loans to China and India to buy Russian equipment, thereby creating jobs and securing profit for our companies,” Putin said.

The prime minister told the party congress that the government had already made a decision “to allocate $1 billion to the International Monetary Fund to assist countries in a particularly difficult financial situation”.

The Russian premier also proposed cuts in profit tax to help companies weather the financial turmoil.

“We must cut profit tax by four percent from Jan 1, 2009 at the expense of the federal budget. This will cost the government 400 billion rubles [$14.5 billion]. All this money will stay in the economy next year and will work in the economy,” Putin said.

Russia’s current profit tax stands at 24 percent, of which 6.5 percent is paid to the federal budget and 17.5 percent to regional budgets.

Putin also unveiled measures to help the unemployed and proposed raising the level of monthly unemployment benefit by 1,500 rubles ($55) from the current figure of 3,400 rubles ($124), Putin said.

He also assured Russian depositors that the government would guarantee 98.5 percent of all their savings held in Russian banks.

The overwhelming majority of Russian deposits - 98.5 percent, are fully protected by the state, Putin said.

Russian President Dmitry Medvedev signed bank deposit insurance legislation earlier this fall, increasing the sum guaranteed to depositors to 700,000 rubles ($26,800) from 200,000 rubles.

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