The Kremlin is set to cut funding to hundreds of Russian towns centered around a single industry, Vedomosti business daily quoted the Finance Minister as saying on Thursday.
The draft budget for 2011-2013 does not include allocations for hundreds of the so-called "mono-towns," Alexei Kudrin said.
A support program for Russia's mono-towns was implemented by Prime Minister Vladimir Putin after thousands of workers took to the streets in the northern town of Pikalevo amid mass lay-offs and cut-backs in June 2009.
With hundreds of factories forced to close by the global economic downturn, the government feared the protests might spread to the other mono-towns across Russia.
But now that the Russian economy is beginning to show signs of recovery, the government is complaining that the mono-towns are not using the billions of rubles offered to them.
The Regional Ministry says the government has earmarked 27 billion rubles ($872 million) for 27 mono-towns, including Tolyatti, hometown of Russia's largest carmaker AvtoVAZ, this year.
The towns, however, have been slow to claim the cash on offer, Deputy Finance Minister Anton Siluanov told Vedomosti, adding that some 7.6 billion ($245 million) had not yet been claimed.
"As practice has shown, the use of government funds amounts to nothing," Siluanov said.
He said a special fund, worth some 30 billion rubles ($969 million), had been set up to aid the mono-towns, while Vnesheconombank, which ran the 2009 program, will continue to invest in local projects.
PR Group CEO Bulat Stolyarov said a long-term support strategy was needed to improve the running of provincial towns and prepare cities to accommodate 20-25 million people from defunct mono-towns.
MOSCOW, September 16 (RIA Novosti)
