Soviet President Leonid Brezhnev disclosed today that his government has reduced its planned capital construction by the equivalent of $42 billion during the current five-year plan and broadly hinted that the funds are being diverted to defense needs.
The decision was taken as the government adjusted its current five-year economic plan, shaping it, as Brezhnev put it, under "uneasy conditions" due to the third poor grain harvest in a row and "the complication of the international situation."
The latter phrase suggests that the change of priorities is to a large extent a response to President Reagan's defense policies, particularly his plan to rebuild U.S. strategic strength. The Soviet plan for 1981-85 had been worked out during the past year and apparently did not take into account changes in U.S. policies.
The cut in capital construction, which would include major industrial projects and such infrastructure items as roads, railroads and airports, was given as a flat figure equivalent to $42 billion over the five-year period with no indication of the percentage it represents. No further details were available.
Brezhnev and other Soviet leaders have frequently denounced the Reagan defense policies as being designed to achieve U.S. strategic superiority over the Soviet Union. They have also asserted that they are prepared to develop "an appropriate counterbalance" for each new U.S. weapons system.
Apart from increased defense needs, the Soviets are believed to have been forced to seek budget economies because of their extended commitments ranging from Poland to Afghanistan. The question of food shortages in the Soviet Union, however, is also serious and Brezhnev said today that "somewhat more resources" have been allocated to the agricultural sector.
Yet, according to foreign analysts here, funds will have to be found for the military to meet what is perceived here as a serious American challenge. Both in public and in private Soviet officials have repeatedly said that that would be done.
The Soviet leader, in a speech before the policy-making Central Committee, made no reference to the Soviet military budget, according to portions of his long address distributed by the news agency Tass.
But he talked about the entire Soviet economy suffering "great damage" from the successive poor harvests and appealed to all citizens to work harder and more efficiently. "This, in the final count, is the main, decisive thing," he said.
The speech was notable for its frankness. Brezhnev conceded the existence of food shortages and vowed to develop a "food program" to ensure adequate supplies. He said that agriculture had suffered because of "factors which are entirely or partially beyond our control."
Food, he said, "is economically and politically the central problem of the five-year plan."
Brezhnev did not give any figures for this year's harvest. Agricultural experts here say it was expected to yield around 170 million tons or well below last year's disappointing 190 million tons. It is the third year in a row that the Soviets will be between 40 to 70 million tons short of targeted goals.
The Soviet leader cited rising energy requirements as one of the main national concerns and called for measures to encourage savings. He repeatedly returned to the theme of "restructuring the style of our economic activity and economic thinking, methods of planning and management."
Brezhnev referred to the "current demographic situation" -- the sharp decline in the rate of population growth -- which he said "necessitates a better use of manpower resources" and greater emphasis on technological modernization.
He said the plan, which is due to be adopted by the Supreme Soviet next Tuesday, calls for limiting the number of employes at certain enterprises and for efforts to induce pensioners to rejoin the labor force.
The "only" way to solve all these problems, he asserted several times, "is through a growth of production, an increase in labor productivity and effectiveness of the economy."
Speaking about agriculture, he said that "the experience of many years has shown that we have unfavorable weather for agriculture almost every other year. Consequently it should be viewed not as an exception but rather as quite a usual natural phenomenon for our climate."
In this context, he said, a strict specialization of agricultural production should be adopted according to "climactic adversities." At the same time, the industries servicing agriculture must be improved along with the system of procurement, storage, processing and transportation.
Brezhnev also asserted that local collective farms should have "the final say" on matters pertaining to their business and he went out of his way to encourage local initiative and cultivation of private plots.
"It is ncecessary to support in every possible way this initiative and enterprise in this matter," he said.
The plan, he said, now calls for a "modest" growth but it promises to improve the consumer sector of the economy.
The party, Brezhnev said, "sees the existing difficulties" since there are continued "hitches in the supply of meat, dairy products, cotton fabrics and a number of other products."
But the Soviet leader spoke in general about the program, which is to be presented formally by NikolaiBaibakov, head of the state planning, and Finance Minister Vasiliy Garbuzov to the Supreme Soviet Tuesday.
In his speech, Brezhnev repeatedly described the program as "a difficult and demanding plan" that will demand "double and treble our efforts to carry it out."
This can be done by "thrift" and "wise management of resources," he said.