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The pandemic forced Moscow business and government to work in new conditions. Support measures were introduced for entrepreneurs, programs of subsidies and benefits were launched. How the city’s economy coped with 2020 – read this article.

2020 turned out to be one of the most difficult and unpredictable years for the whole world. The pandemic has hit different cities, regions and countries, in all areas of life. Moscow’s economy was no exception, but it withstood this period of extreme overloads, challenges and changes. Even during severe restrictions, key city projects have not been suspended, and companies and enterprises have proven that they can make decisions quickly and adapt to the situation.

“During the period of time constraints, we managed to stabilize the economic situation in the city. Now the city’s economy has adapted to work in the prevailing conditions, which was largely facilitated by support measures. At the moment, most industries are showing growth. The total turnover of trade and service enterprises has stabilized and, even taking into account the deterioration of the epidemiological situation in November, slightly deviates from the pre-crisis level, and by the same month of last year shows a slight increase. We also managed to maintain the pace of production: for 11 months of 2020, the industrial production index increased by 4.1 percent compared to the same period last year, ”said the Deputy Mayor of Moscow for Economic Policy and Property and Land Relations

Vladimir Efimov

He added that the volume of investments in fixed assets in the capital for nine months amounted to 1.9 trillion rubles, which is 11.5 percent more than in the same period last year, and accounts for 16 percent of all investments in the country. According to this indicator, Moscow confidently ranks first among the subjects of the Russian Federation.

Healthcare and Social Support: Budget for 2021

The stability of the capital’s economy and readiness for new challenges of the time are confirmed by the Moscow budget… It provides funds for the implementation of all social programs (health care and support for citizens), as well as for the construction of roads, transport networks and social facilities.

In 2021, more than 56.9 percent of city budget expenditures will be allocated to social needs. This is about 1.8 trillion rubles. The priority for 2021 will be the state program for the development of health care, expenses on it have been increased by 13.4 percent. Next year they will exceed 748 billion rubles (including funds from the Federal Mandatory Health Insurance Fund).

The priority task will be to provide citizens with affordable and high-quality assistance. This applies to the prevention of cardiovascular and infectious diseases, oncology, receiving high-tech assistance, as well as free vaccination against COVID-19. From 2021, the Healthcare Development program will become the largest in the city in terms of funding. They will also provide those in need with free or subsidized medicines.

For the social support of Muscovites – this includes additional payments to pensions, benefits for travel in public transport, payments for housing and communal services, pharmaceuticals and much more – the budget provides for almost 532 billion rubles… Including for direct cash payments to families with children it is planned to allocate 63.5 billion rubles, to the older generation – 188.8 billion rubles. These funds will allow the indexation of benefits and compensation payments at a level above inflation.

The Moscow City Duma adopted the Moscow budget for 2021 and the planning period for 2022 and 2023 Moscow plans to increase budget spending on social support in 2021

Open dialogue with business

During the pandemic, the city authorities provided comprehensive support to business. For this, back in March they created operational headquarters for economic affairs, which was headed by Vladimir Efimov. At the headquarters (at the same time in March) began to work Moscow economy support center… It provides a dialogue between the authorities and the business community to obtain information on the real state of affairs in the city’s economy and on the support needed by business.

On the basis of the center, an online service and a hotline have been operating since March to collect proposals and promptly provide information to business. More than 70 percent of the applications received were taken into account when forming anti-crisis decisions to support the capital’s economy. Since the beginning of its work, the Center for Economic Support has received more than 12 thousand applications from business representatives, and they continue to advise entrepreneurs to this day.

Specific Assistance: Benefits, Delays, and Subsidies

The Moscow government, focusing on business needs, in the spring developed and adopted four packages of support measures in the amount of about 90 billion rubles. A fifth package of measures was also adopted in December. For many entrepreneurs, subsidies and incentives have helped them get through hard times.

First package approved on March 24. He has supported organizations in the catering, tourism, culture, sports, leisure and hospitality sectors. Entrepreneurs have been granted tax and trade tax deferrals. In addition, organizations that were forced to stop working were exempted from paying rent for city property for the second quarter of 2020.

Second package of measures was adopted on March 31. He expanded the list of companies that received tax and trade tax deferrals and were exempted from rent. In addition, subsidies were introduced for small and medium-sized enterprises, exporters and franchisees, as well as preferential loans for young companies.

Third package of measures business support approved on April 15th. He has expanded existing lending solutions, assisting developers, hotels, cinemas, continuing education organizations, sanatoriums, social entrepreneurs, and small businesses that buy property leased from the city. We also introduced support measures for organizations that rent real estate from private shopping and office centers.

Real estate owners who lease it out for trade, services, catering and hotels are entitled to compensation for property tax and land payments for two quarters of 2020 in full if they have reduced the rental rate by at least half (and at least twice more than the amount of compensated taxes). For owners who conduct this activity on their own, there is the possibility of compensation for half of the taxes. So at the same time, the city supported both landlords and specific companies that rent premises for hotels, offices and shops.

Fourth package of measures was published at the end of May. The list of affected industries was supplemented by private medical clinics. They were extended until December 31, 2020, the deadline for payment of advance payments for the first quarter of 2020 for property tax and land tax. In addition, clinics renting land plots and non-residential objects from the city were exempted from rent from March 1 until the end of the high alert mode, but not earlier than July 1. Also, Print kiosks were exempted from payment for the right to carry out trading activities for three months – from April 1 to June 30.

December adopted fifth support package… Thus, the Moscow Government has extended the program “14 subsidies”. Subsidizing the interest rate on loans for small and medium-sized businesses was also extended for another six months – until July 1, 2021. And the minimum and preferential rental rates for urban non-residential properties will operate throughout 2021. Some entrepreneurs were exempted from payment under contracts for the implementation of trading activities in non-stationary retail facilities for the period from March to June 2020.

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By mid-December, more than 50 thousand Moscow organizations, employing 770 thousand people, have already been able to take advantage of the support measures. They received actual support in the amount of 35 billion rubles. The most in demand among Moscow business were tax deferrals, rental vacations, grants and subsidies.

Among them are five thousand companies that received deferrals for property tax and land tax for a total of 2.5 billion rubles. Almost 26 thousand trade organizations were granted a grace period for the trade fee, which amounted to almost a billion rubles. 3.3 thousand organizations were exempted from payments for lease of city property for the period of suspension of activity, which totaled 2.6 billion rubles. 3.6 thousand organizations received lease deferrals until the end of the year, the amount of support amounted to 16.4 billion rubles.

Some anti-crisis support measures have been developed specifically for small and medium-sized businesses. These are subsidies, soft loans and grants, which have been used by more than 13 thousand companies.

From the construction of schools and clinics to the opening of new metro lines

This year, despite the pandemic, the capital continued to implement all major projects. So, by 2021, the queue for improving housing conditions was reduced to 50 thousand families.

In 2020, the city built more than 300 thousand square meters of housing under the Housing program. A comfortable urban environment with landscaped green courtyards, parks and recreation areas is being created in the new quarters. The implementation of the renovation program continued. Since its inception, more than 80 residential buildings have been built in Moscow with a total area about one million square meters.

The social infrastructure of the capital is also actively developing. This is facilitated by Targeted investment program… Among the main projects are the construction of roads, schools, kindergartens, clinics, hospitals and other facilities. The implementation of this program annually accounts for 20 percent of Moscow’s budget expenditures. Despite the pandemic, volatility in global markets and supply interruptions, major infrastructure projects in transport, healthcare and education have been implemented in Moscow this year.

Special attention is paid to the transport system of the capital. In 2020, 115.5 kilometers of roads were put into operation, as well as associated infrastructure… In the spring of 2020, in the midst of a pandemic, the second section of the Nekrasovskaya metro line was opened. Six more have been added to the four stations operating since 2019. The branch made it possible to unload the Tagansko-Krasnopresnenskaya line, which is known for its high passenger traffic. On December 31, the tenth station of the Big Circle Line, Elektrozavodskaya, was opened.

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Construction of all sections of the Big Circle Line, the largest metro ring in the world, continues in Moscow. In the coming years, work will continue to extend the existing lines and build new radii: to Kommunarka and Troitsk, Rublevo-Arkhangelskoye and Biryulyovo.

The Moscow Central Diameters (MCD) project is also developing. The new surface metro connects the capital with the Moscow region, modern trains run along the lines at intervals of five to seven minutes during rush hours. At the end of 2019, two diameters were opened, their development continued throughout 2020, as well as preparations for the launch of three more diameters. Work on advanced and promising diameters will continue in 2021.

And other victories

Despite all the difficulties, 2020 has become a real impetus for growth in other areas. One of the most significant events was the launch of the state program of preferential mortgages at a rate of 6.5 percent per annum. The support measure stimulated the housing market, the construction market, and the financial sector. As a result, Moscow borrowers have set an absolute record in the entire history of the market. Rosreestr recorded 12 thousand mortgage loans in October 2020, which is 51 percent more than in October 2019. The Bank of Russia reported that the number of housing mortgage loans issued to Muscovites for 10 months of 2020 amounted to 87.25 thousand and increased by 37 percent.

2020 was a breakthrough year for the integrated development of the territories of the former industrial zones. Thus, Moscow signed the first two agreements in the country on the integrated development of the former industrial zones Oktyabrskoe Pole and Korovino. A modern industrial technopark, a business center, residential buildings, as well as all the necessary infrastructure for work and life (including kindergartens, a school, a clinic and parking lots) will appear on the site of the former six-hectare precast concrete plant on Oktyabrsky Pole by 2026. A new production and business center with modern infrastructure will be built in Korovin, on the site of the former House-Building Plant. For four more territories – Bratsevo, Chertanovo, Yuzhnoye Butovo and Altufevskoe highway – contracts will be concluded in 2021. The total area of ​​the former industrial zones is almost 60 hectares.

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In total, there are about 150 territories under development, where it is planned to build more than 37 million square meters of industrial, public and social, as well as residential facilities. The development of the territories will give residents of the capital about 500 thousand new jobs, attract seven trillion rubles of private investment and provide almost three trillion in budget revenues.

Economic stability has helped Moscow rise in international rankings… So, in 2020, Moscow improved its position in 23 world rankings. In 2020, Moscow was ranked fourth in the list of the best cities in the world according to the Canadian consulting agency Resonance Consultancy. The capital also took 12th place in the CEOWORLD Magazine rating, which assesses cities in terms of their impact on the global economy. Experts note the positive dynamics of the capital in terms of such indicators as the economy, digitalization, innovation and start-ups, sports and the environment.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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