February 28, 2018 / 4:42 PM / in 4 months

Putin to pledge higher health, education spending in Thursday speech: sources

MOSCOW (Reuters) - Russian President Vladimir Putin is expected to promise higher welfare and infrastructure spending when he addresses parliament on Thursday, but to be unspecific about how the increase should be financed, four sources familiar with his proposals said.

Russian President Vladimir Putin delivers a speech during a gala show, marking the Defender of the Fatherland Day, at the Kremlin in Moscow, Russia February 22, 2018. REUTERS/Yuri Kadobnov/Pool

Polls show Putin, who has dominated Russian politics as president or prime minister for the last 18 years, is on track to be comfortably re-elected on March 18.

On Thursday, Putin will deliver his annual address to parliament and other members of the Russian political elite, delayed since late last year.

Sources familiar with his proposals told Reuters that the speech had been reworked many times because there was no agreement between different parts of the government about measures to spur economic development and how to finance them.

However, the sources said that officials had managed to agree on an increase on health, education and infrastructure spending in principle, but that there was still a lot of work to do when it came to drafting specific changes.

“It seems like there is a kind of political agreement that the president cannot mention the sources (of financing for the spending increase),” one senior government official said.

“He will speak of the (policy) direction and the government should then propose how it should all work.”

A debate among Russian officials about higher welfare and infrastructure spending — something the World Bank believes would help Moscow spur growth — has intensified in recent months among government officials.

There is a consensus among Russia’s ruling elite that the pension age will need to be increased and other socially-sensitive steps taken, but Putin is not expected to mention those in his speech, the sources said.

The main decisions on how to finance higher social and infrastructure spending are expected only to be firmed up after Putin formally begins what would be his fourth presidential term in May, according to the sources.

The Kremlin did not reply to a Reuters request for comment.

Reporting by Darya Korsunskaya, Elena Fabrichnaya, Polina Nikolskaya, Polina Devitt, Andrey Ostroukh, Jack Stubbs and Denis Pinchuk; Writing by Katya Golubkova; Editing by Andrew Osborn and Peter Graff

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