Medvedev urges private cos to help modernize Russian economy

MOSCOW: Russian President Dmitry Medvedev on Thursday urged private businesses to help the government modernize the country in return for government aid distributed during the economic crisis, ITAR-TASS reported.

"We should make joint efforts to turn our economy around towards modernization," he said at a meeting of the government commission for modernization and technological development.

"We should reduce our humiliating dependence on commodity exports and stop utilizing the Soviet scientific and industrial potential - it won't help us much anymore," Medvedev said.

Medvedev also called for attracting foreign investment and promoting patent rights and venture capital to achieve the goal of modernization.

Medvedev asked private companies to present proposals on innovative "breakthroughs" within two months.

Meanwhile, Anatoly Chubais, CEO of nanotechnology company Rusnano, proposed that businesses present innovative projects to the commission sometime in June–August.

Chubais also said that not only existing industries should be modernized but completely new industries should be created as well.

Deputy Prime Minister and Finance Minister Alexei Kudrin, who was also present at the meeting, outlined proposals on tax incentives for innovation.

In particular, he suggested applying the reduced rate of mandatory social insurance payments for more innovative companies. He said that as a result the tax burden would be reduced by 70 billion rubles to 100 billion rubles.

Currently, the reduced rate amounts to 14% of wages, while the full rate is 26% and is scheduled to be raised to 34% in 2011.

Kudrin also said the government was considering raising the rate of social insurance payments to 32% in 2011, instead of to 34% as planned.

Additionally, he proposed exempting energy efficient equipment from the property tax for three years.