Boris Yeltsin's newly appointed economic adviser told the government Wednesday it should adopt tougher inflation targets outlined by the president, which are half those proposed recently by the Finance Ministry, Itar-Tass reported.


Speaking a day ahead of a crucial cabinet meeting on the budget, Alexander Livshits said the government should follow the target of reducing inflation to 3 to 5 percent monthly by the end of the year as Yeltsin outlined in his state-of-the-nation address to parliament last week, Itar-Tass said.


Livshits, described by Itar-Tass as a "tough monetarist," was appointed Wednesday as head of an experts group that would advise Yeltsin on the economy.


It would appear that Livshits is filling the shoes of the former deputy prime minister, Yegor Gaidar, who, in different positions over the past two years has served as the president's adviser on economic matters.


Yeltsin's inflation targets differ sharply from the 8 to 10 percent year-end inflation mark contained in a Finance Ministry budget proposal last month and suggest a far tougher monetary policy than the government of Prime Minister Viktor Chernomyrdin has so far indicated it is willing to follow.


The Finance Ministry, in a report prepared for a cabinet meeting Thursday, submitted a budget proposal that calls for 6 trillion rubles ($3.5 billion) more spending than what it was proposing two weeks ago, according to Interfax.


The report said the budget calls for 182.2 trillion rubles of expenditures, against revenues of 120.7 trillion.


The deficit of 61.5 trillion rubles, or about 10.2 percent of gross domestic product, is 5.5 trillion rubles higher than had been proposed in earlier budget drafts.


The Finance Ministry could not be reached for comment Wednesday, but the government in recent weeks has made major concessions to the defense and agricultural industries.


After a week of delays, the government is scheduled to approve its budget by the end of the week. It then must be approved by the parliament and the president.


The International Monetary Fund, which is negotiating with Russia on a $1.5 billion assistance loan, is likely to send a mission to Moscow next week to review the figures, a monetary source said Wednesday.


The aim of the mission, the second in as many months, would be to sign an agreement on inflation and deficit targets that eluded the previous IMF team because the budget had not been prepared.


The team was able to sign only a general memorandum on budgetary principles with the government in which it affirmed its commitment to lower inflation and reduce the deficit.


A visit by IMF managing director Michel Camdessus, which was called off last week because of scheduling conflicts, could come later in the month, the source said.


Billionaire financier George Soros on Wednesday spoke out in favor of tough IMF conditions attached to the loans for Russia, describing the economic reform plans of the government as a sham, Reuters reported.


"I think one should be ready to support economic reform where the opportunity arises but one should not go through a kind of a sham when the promise of economic reform is also a sham," Soros told reporters in Bonn.