Kremlin Plans More Goods for Consumers

The Soviet leadership on Friday announced a series of broad decisions to reorient the country’s economy toward greater production of consumer goods at the expense of defense spending and new development projects.

The Communist Party’s ruling Politburo, meeting with other top party and government officials, also ordered immediate steps to reduce the government’s huge budget deficit. It is now calculated to amount to as much as $165 billion a year--11% of the gross national product and 2 1/2 times the announced figure. The Kremlin will seek to curb the resulting inflation, which has grown to an estimated 8% a year.

The Politburo also took steps to decentralize economic administration and planning, shifting much of the decision-making from the capital to the politically restive national republics and regional centers, and giving more autonomy to the long-shackled enterprises.

The first priority, however, was clearly increased production of consumer goods. Described as the key to the success of the party’s economic policies and thus of its overall reforms, this will become the focus of the government’s development strategy.

More consumer goods, the Politburo said, were meant to satisfy popular demand, putting this ahead of the traditional goal of developing further production capacity. This is aimed at reinforcing confidence in President Mikhail S. Gorbachev’s program of political, economic and social reforms and its ability to improve the everyday life of the average Soviet citizen.

Complex Economic Crisis

At the same time, the new consumer sales should reduce the government’s increasing deficit, which together with the mounting inflation, reflects and amplifies the Soviet Union’s complex economic crisis.

To meet these demands, more enterprises, particularly those making electronics and other high-tech products, will shift their output from capital to consumer goods. The structure of the country’s imports will also be changed to ensure that more consumer goods are in the marketplace.

Gorbachev had earlier announced major cuts in defense spending, including the production of military equipment. The party endorsed his pledge that this output would be shifted to the civilian sector of the Soviet economy.

The measures, which form an essential element of the fundamental restructuring of the Soviet economy being undertaken by Gorbachev, followed the adoption of a draft statement on the general principles that will govern economic reform in the country.

Many of the basic questions, such as the leasing of communal farmlands and state enterprises to groups of workers, families and even individual entrepreneurs, have been hotly debated in recent months. The debate has caused obvious and often sharp divisions in the party’s leadership because of the profound political implications as well as economic shifts involved.

But the Politburo’s announcement of the decisions avoided taking sides immediately in those controversies and provided very few details of its actual decisions, apparently to give both the winners and losers time to weigh their positions and decide whether to accept the decisions or to argue further against them.

Yet the far-reaching nature of the measures was clear. They appeared to lay the basis for the discussion of agricultural policy--and implicitly of the country’s whole economic strategy--planned for mid-March by the party’s Central Committee.

“Leasing,” one of the highly controversial, touchstone elements of Gorbachev’s reforms, will “receive all-around development,” meaning the effective transfer on a contractual basis of communal and state enterprises to entrepreneurs, working as cooperatives, families or alone.

Enterprises Will Close

Many money-losing enterprises will be closed if their workers cannot be persuaded to take them over on such a contract basis.

Deep cuts will be made in capital investments, particularly large projects, in defense spending and in the day-to-day functioning of the government bureaucracy in a concerted effort to reduce the budget deficit. Efforts will also be made to increase state revenues.

Further steps will be taken to break the total control that the central government ministries have exercised for more than 50 years over industry, by decentralizing decision-making.

In strengthening the powers of the constituent republics, the Soviet leadership apparently intends to meet the growing demands in the Baltic region, in Armenia, Georgia and Azerbaijan, in the Ukraine and other areas to become “the master of our own home,” as Estonian activists put it.

In addition to greater authority over the local economy, the governments of the 15 republics will receive more power to decide on the utilization of local resources, to protect the environment and to develop their own programs.