MOSCOW, December 29 (RIA Novosti) - The minister of economic development and trade addressed the government Thursday, summing up the outgoing year and laying out goals for the future.

As for Russia's ambitious plans to double GDP by 2010, German Gref said it would be impossible to attain it in such a short time, but promised faster economic growth.

"The GDP will not be doubled by 2010, but we will be able to achieve fairly high economic growth using additional mechanisms in the medium term to ensure that GDP will be doubled in the longer term," Gref said addressing a government session highlighting the program of the country's social and economic development until 2008.

In his state-of-the-nation address to parliament in 2003, President Vladimir Putin set for the government an ambitious goal to double the nation's GDP in 10 years, then fixed the deadline for 2010, but these plans have since been repeatedly revised.

Prime Minister Mikhail Fradkov cited the president as saying that the doubling of the GDP had not been deleted from the agenda. He urged the government to adopt a proactive economic and industrial policy to step up the application of the mechanisms in the medium term that Gref had mentioned.

The economic minister continued that competitiveness was the cornerstone of the government's mid-term policy.

"This is the cornerstone of the government's policy and a major mid- and long-term challenge," German Gref said.

According to the minister, Russia's competitiveness depends on the health and competitiveness of its people, business and government institutions. Therefore, the mid-term program provides for measures to develop the country's health care and education in developing human capital.

Important draft laws, including bills on competition and concession agreements, have been prepared as part of the mid-term program, Gref said. The program also includes a package of measures to fight inflation and develop oil production, and sets a mechanism for cooperation between private and state companies.

Gref said anti-inflation measures were designed to ensure macroeconomic stability and accelerate economic growth, while there was also a provision for constraining prices for fuel and utilities. In 2006, excise duties on petrol will not be raised, the minister said.

Gref said the 2006 meat import quotas would remain in effect until 2009, and added that his ministry and the Agriculture Ministry were working on a law on agriculture designed to create better conditions for investment in the sector.

As for the ruble appreciation, the minister said the real effective rate of the ruble would gain 4-6% under any scenario in 2006.

"On average, we expect the ruble's appreciation to slow by more than two times next year," German Gref said, referring to the ruble's real effective rate in 2005, which grew by more than 10%.

"We hope that under any scenario, the ruble's appreciation will range within 4-6% in 2006 and will eventually be reduced by 1 percentage point per year," Gref said.

The minister also admitted the possibility of adjusting the oil cutoff price every year, depending on the macroeconomic situation.

"The cutoff price can go up or down depending on the macroeconomic situation," Gref told a news conference following the government session. "When there is the need for additional cash sterilization, it could be lowered or raised when there is no such problem."

"However, that does not mean we should significantly increase government spending," Gref said. "We should, instead, improve the effectiveness of government spending."

In contrast to Gref's comments, Finance Minister Alexei Kudrin said earlier he strongly opposed adjusting the oil cutoff price because it would prevent the government from applying consistent international tax and budget policy principles.

Commenting on the transition of state-owned oil giant Rosneft and its 12 major subsidiaries to single shares, the minister said he approved of the move.

No ultimate resolutions have yet been made on Rosneft's initial public offering (IPO) on Russian exchanges and the London Stock Exchange, Gref said.

"No decision has been made yet on the terms, volume and mechanisms," he said.

Earlier, officials said funds generated by Rosneft's IPO would be used to pay off loans to international banks taken out by its sole shareholder, state-owned Rosneftegaz, to purchase a 10.74% stake in energy giant Gazprom.

Gref also urged state companies to place their securities on Russian stock exchanges.

"We should make our companies, particularly the state-owned ones, place securities on the domestic stock market," Gref said, adding that the market would otherwise remain undeveloped.

The minister also said the Russian market was not big enough and could only accommodate $3-4 billion, according to his ministry's estimates.

"Where companies like Gazprom are concerned, there is a fair limit in terms of emissions," Gref said, adding that the volume of the Russian market had to be taken into account in each case.

In further comments on the natural gas giant, Gref said all the government documents on lifting the "ring fence" from around shares in Gazprom would be released by January 1.

Continuing his remarks about further development of the national energy sector, the minister proposed establishing tax holidays lasting up to seven years for new oil deposits in Russia. Gref said the move would help accelerate the development of new fields in eastern Siberia and the extreme north.

He said that to stimulate the development of new oil fields the ministry had decided to abolish severance taxes for up to seven years starting from the registration of an oil deposit. However, Gref added added that they would be imposed after 20% of the deposit had been explored.

The ministry's new proposals also include the reduction of severance tax for old deposits that have been 80% explored.

"Only this measure would allow us to explore new small deposits and continue exploring old deposits producing 10-15 million metric tons of oil annually," he said, adding that the government should discuss the proposals and make the final decision in the first quarter of 2006.

The minister also said that the value added tax (VAT) could be cut to 15% and made uniform starting in 2007.

According to Gref, the issue is still being discussed and some members of the government are proposing that the VAT rate be reduced to 15% from 2008.

"But I would propose making this decision in 2006 and cutting the rate starting January 1, 2007," Gref said.

He said the term of the VAT's refund to exporters should not exceed two or three months.

Gref said it was ridiculous that the Federal Taxation Service returned VAT to military arms exporters only two or three years later.

"I see no point in the work of the tax service," he said. "We create obstructions for ourselves and then fight them."

The minister said most of the military enterprises returned their VAT through courts and that the issue must be settled in 2006.

Gref also called the current system of social aid extremely ineffective, and said the system had to be overhauled to reduce the percentage of people living below the poverty level from 17% in 2004 to 9% in 2010.

The minister also advocated tighter control over the spending of the country's natural monopolies.

"The natural monopolies have made a series of attempts to break away from the government control," he said.

The minister continued that the rate for privatized enterprises to repurchase their land should remain unchanged at 5% of its registered value, and 20% for Moscow and St. Petersburg.

According to Gref, the value of land being used by privatized enterprises was $22.8 billion, but would be just $8 billion if the 5% rate was set.