Russian Parliament OKs Austerity Budget Plan : Economy: In boost for Yeltsin, lawmakers back blueprint. Deepening recession is expected.

The Russian government won a stormy battle over its Western-backed blueprint for economic reform Wednesday by persuading Parliament to accept the outline of a relatively tight 1994 budget. The squeeze is certain to deepen Russia’s recession and raise unemployment.

Heeding a call for austerity by Prime Minister Viktor S. Chernomyrdin, lawmakers voted 233 to 73 to adopt his plan to spend $104 billion and collect $66 billion.

The deficit is high by Western standards but low enough by Moscow’s calculations to cripple inflation, which hit nearly 1,000% in 1993.

The vote capped a turnabout in the fate forecast for Russia’s free-market reform program in January when Chernomyrdin forced its leading architects out of the Cabinet. They then predicted that the prime minister, a former Soviet gas industry boss, would wreck their program with huge state subsidies to ailing Soviet-era factories.

But Wednesday, Chernomyrdin stood in the Duma, the lower house of Parliament, and declared: “Yes, it’s a tough budget. Today a tough budget is the only way to mobilize the vitality of market forces. . . . It is the starting point without which we cannot leave this room.”

And--to the surprise of many who predicted resistance by foes of reform--most lawmakers took Chernomyrdin’s word that the government had no hidden resources and voted his way. The main opposition came from reformers who wanted an even smaller deficit.

“We have to switch from political ambition to reality,” said Antonia Zhilina, a deputy from the centrist Women of Russia party. “This budget cannot satisfy everyone, but it’s our last chance for stabilization.”

The vote was one of the few legislative victories for President Boris N. Yeltsin since Parliament was elected last December. Since the Soviet Union collapsed 2 1/2 years ago, control of the Yeltsin government has swung unpredictably between reformers trying to shrink the state and conservatives trying to prop up the industrial giants of the old order. The current period of reformist austerity has run eight months, the longest of all, and brought inflation below 10% in each of the past three months.

Chernomyrdin promised a tight budget to the International Monetary Fund in March in exchange for a $1.5-billion loan. IMF approval cleared the way for talks with Western nations on rescheduling Russia’s $80-billion debt.

But unemployment, unknown in Soviet times, is creeping upward. A growing number of factories, many the chief employer in their home cities, are so starved for state credits that they are sending workers on unpaid vacations. Government officials estimate that 5 million Russians, about 7% of the work force, will be jobless by midyear.

Zil, which makes trucks and Russia’s most famous limousines, announced last week that as many as 20,000 of the 85,000 workers at its Moscow assembly plants will be laid off by year’s end. In Ekaterinburg, Uralmash is closing its 35,000-employee metal factory from May to August. Even cosmonauts are being cut from the space program.

Despite Western efforts to help Russia set up a “social safety net” of temporary jobs and welfare programs, the government has done little for the unemployed. Right-wing and Communist foes are trying to exploit discontent over layoffs in a new round of street rallies aimed at driving Yeltsin from office.

His advisers are divided on the threat of unrest. The Economy Ministry, reporting a 25% drop in industrial output over the past year, warned last week of “the danger of a social explosion.” In an interview after the budget vote, Labor Minister Gennady G. Melikyan disagreed.

“Unemployment will grow, of course, but this is not lethal,” he said. “The concern here is that it does not become an avalanche. We will try to make the process gradual. . . . Ten percent (unemployment) is tolerable.”

The budget outline adopted Wednesday sets slightly higher spending and deficit figures than the ones Chernomyrdin negotiated with the IMF. Budget allocations were left for another day, but the limits are not subject to change.

During an often raucous debate, several lawmakers called for higher spending. Alexander Piskunov, a centrist, called for more defense spending to avoid unrest in the army. He suggested a deficit of 41% of all spending, as opposed to Chernomyrdin’s 36% limit.

“No way!” the prime minister shouted, leaping from his seat. “Everything must stay within 36%.”

It is far from clear that the budget will save the economy. Some observers predict that revenues will fall short and the real deficit will be nearly double the limit. Other critics say the economy simply cannot recover from Chernomyrdin’s medicine.

More optimistic officials in Russia and the West say the dismal employment and recession figures do not reflect the dynamism of an emerging, hard-to-measure private sector that can only benefit from low inflation.

Andrei Ostroukh of The Times’ Moscow Bureau contributed to this report.