ZURABOV: PENSIONS CANNOT SOAR NOW

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MOSCOW, JUNE 23 (RIA Novosti) - The splitting of duties between the federal centre and regions in financial security for those enjoying privileges is not contrary to the Russian constitution, believes Health and Social Development Minister Mikhail Zurabov.

"There is no breach of constitutional rights in the decision to give regions the powers for the social protection of some categories of citizens", he said on Wednesday at the sitting of the State Duma local self-government committee.

Zurabov recalled that next year entities of the Russian Federation will decide on financing for labour veterans, the repressed by the previous regimes, workers on the home front.

The decision to split, starting in 2005, between the federal centre and regions financing for different categories of benefits is a compromise, Zurabov said. In his view, it would be more correct to create a privilege-financing system at the federal level, which would require additional financing resources.

Zurabov also said that there are no possibilities in existence now for sharply increasing pensions. "Leave for a better time the idea of increasing pensions two times", he said.

He stressed that the state expenditure on pensions has considerably increased from 761 million dollars a month (in the 1999 figures) to 2.7 billion dollars a month (in the 2004 figures).

"We are spending 6.1 percent of the gross domestic product on pensions", he said.

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