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Putin Demands Private Business Fund Russian Science as War Drains Federal Budget
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Russian leader Vladimir Putin is urging private domestic companies to finance scientific development as state funding declines amid heavy defense spending.
One out of every three federal rubles is currently directed toward Russia’s full-scale invasion of Ukraine, as reported by The Moscow Times on August 11.
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According to data from the Institute for Statistical Studies and Economics of Knowledge at the Higher School of Economics (ISSEK HSE), the federal budget allocated 792.1 billion rubles ($8.7 billion) to civilian science last year.
This accounted for only 2.5% of total government expenditure, making it 22 times smaller than the 17.8 trillion rubles ($195.8 billion) spent combined on the military and security forces.
Speaking at a meeting of the Council for Science and Education in Novosibirsk, Putin stated that commercial enterprises must directly commission technological developments.
"We need to set up the work in such a way that domestic business and enterprises act as direct customers of breakthrough scientific solutions and technologies. Taking clear obligations to create successful, competitive products based on them," Putin said.
He added, "To achieve practical, truly breakthrough results, maximum concentration of efforts of all participants in Russia's scientific and technological development is needed."
Although nominal federal funding for research grew by 11% over the past year, real expenditure adjusted for inflation dropped 14% below pre-war levels. Compared to 2013, real scientific funding has fallen by 25%. Spending as a share of gross domestic product reached 15-year lows, dropping to 0.35% of GDP in 2024 and 0.37% in 2025.
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Initiative programs for technological leadership announced by Putin were left without funding following a federal budget deficit that reached 5.6 trillion rubles ($61.6 billion) where the gap expanded.
The primary space exploration initiative received no funding despite an original allocation plan of 10 billion rubles ($110 million). Funding for the automated production and robotics program was reduced by 75%, while funding for chemical development, new materials, and transport mobility projects was cut by 40%.
During the first nine months of 2025, Russia spent $146.4 billion from its budget on military expenditures—four times more than in 2021—which accounted for 39% of total government spending.
Meanwhile, the federal budget deficit grew to $69.8 billion in 2025, prompting the Kremlin to cover its widening fiscal gap by requiring state-controlled banks to purchase $87 billion in federal loan bonds backed by Central Bank liquidity.
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