The Soviet Union, its economy once again affected by harvest setbacks, announced production goals for 1978 that are measurably lower than those called for in the current five-year plan, which was announced last year as a blueprint for narrowing the Soviets' economic gap with the United States within the decade.
In addition to cutbacks for 1978, the Soviet parliament, the Supreme Soviet, was told today by top state planners that some other important sectors of the economy, including various oil and gas production facilities and some basic metals industries, may not meet this year's goals because of production lags, construction delays, and other factors. The leadership exhorted the country's factories and farms to meet and exceed the 1978 goals.
Under the new plan, heavy industrial output will grow by just 4.5 per cent next year, one of the smallest proposed percentage increases since World War II. By contrast, the projected rate of industrial production for this year is 5.6 per cent and the overall economy may exceed that despite the specific problems in some industries, the newspaper Pravda reported yesterday.
In general, industrial output has increased in the Soviet Union each year, but for the past decade, at a slightly smaller rate of increase every year. This has indicated to various observers that the Soviet economy is entering a period of substantial stress as it tries to improve production quality and quantity and continue consumer goods at an acceptable level.
Figures published in the West indicate that the overall growth rates of industrial output under recent five-year plans have declined from an average of 8.4 per cent annual increase in the years 1966-70 to about 6.0 per cent in this five-year plan, which covers 1976-80.
The new 1978 budget calls for a rise in consumer goods production of 3.7 per cent, about 1 per cent less than the 1977 goal, which was itself well above the 1976 goal. The new target for consumer goods reflects continuing concern within the leadership over the need for more and better domestic goods.
Nikolai Baibakov, the state economic planning chief, said that some industries "show insufficient attention to improved technology and so production costs are high. We must concentrate capital better to speed completion of project."
The continuing problems of agriculture have resulted in shortages of grainseed and poultry as well as the fall grain harvest itself. "These shortages have affected economic growth," Baibakov asserted.
The Soviet Union's grain harvest this year was some 17 million tons less than predicted, according to revised figures given at today's session. It totaled 195.5 million tons, instead of 213 million tons called for in the plan. The Kremlin was forced to buy foreign grain again, using foreign currency with which the leadership had hoped to purchase Western technological equipment to improve productivity here.
As a portion of the total budget, defense spending in 1973 will take 7 per cent, a slight decrease from this year's 7.2 per cent. In fact, according to Finance Minister Vasily Garbuzov. The military budget in 1978 will exactly match this year's figure of 17.2 billion rubles ($24 billion). Western defense experts have long held that actual Soviet military spending is well above this.
By contrast, the current u.S. Defense Budget totals about $110 billion, or about 24 per cent of the federal budget.
The Supreme Soviet session lasted slightly less than three hours. It was notable in that Leonid Brezhnev, president of the country and general secretary of the Communist Party, was not present. Brezhnev, who is 71 this month, delivered a "big speech" yesterday at the plenum, according to Tass, the official government news agency.
Sitting toward the front of the large, rectangular hall was Nikolai Podgorny, ousted this past summer as president and replaced by Brezhnev. Podgorny appeared in a jovial mood, laughing and chatting with neighboring delegates and taking greetings from other members who happened by in the aisle.