Putin has called for transforming the Stabilization Fund into the Reserve Fund and the Future Generations Fund.
"The Reserve Fund and oil and gas profits used to finance federal budget expenses should be fixed in legislation and linked to GDP with a three-year transition to a new system of oil and gas profit management," the address reads.
Annual inflation should be reduced to 3%-4%, Putin said.
"There should be a balance between the real growth rate of budgetary expenditure and the economic growth rate, with a view to reducing the tax burden," his address reads.
Under the document, the implementation of budget programs is aimed at eliminating structural limitations in the economy, which push prices up.
The president also called for switching to long-term budget planning for up to 10-15 years and more. Such budget forecasts should include qualitative criteria of budget stability, the adequacy of tax and debt burdens and risk assessment.
The Russian leader also opposed changing the current income tax for individuals, which, he said, has so far proved effective.
However, the excise duty on high-octane gas should be reduced, he said. "Efforts to reform the excise duty system to encourage the consumption of high-quality goods should continue. Among other things, it is necessary to differentiate excise duties on gas in terms of its quality, introducing a lower excise duty on high-quality gas and vice versa," the presidential budget address reads.
The president also insisted on increasing the minimum wage to 2,300 rubles ($87.60) as of September 1, 2007.
Putin also instructed the government to make decisions allowing managers in public sector establishments to introduce payment systems different from the unified tariff as a way of linking employee wages to quality of work.
"I believe it is necessary to keep social pensions within a pensioner's minimum subsistence level in the mid-term," the president said.
The government is required to use the presidential budget address as a basis for its draft budget.
