The upper house of the Russian parliament rejected a budget-busting increase in the minimum wage Thursday, clearing a major hurdle in talks with the International Monetary Fund on a $6.4 billion loan.
But the vote fell just 11 short of the 90 needed for it to clear the Federation Council. There were 20 votes against and 20 abstentions.
The draft -- passed by the State Duma, Russia's lower parliament chamber, on Jan. 25 -- would have raised the monthly minimum wage to 54,100 rubles ($12.94) from 20,500 rubles, Interfax said.
Hardly anyone in Russia earns the minimum pay, but it is used by the government and local authorities as a basis for calculating state-sector salaries and other social payments.
The law was approved by the Duma despite Finance Ministry warnings that it would cost the government 70 trillion rubles, doubling the budget deficit and sending the inflation rate spiraling.
The draft law now will go back for revision to a special conciliatory commission, which includes legislators and government officials. The 1995 budget envisions a modest increase in the minimum wage to 34,400 rubles.
The proposed law has left a cloud of uncertainty over the latest round of IMF loan talks, which adjourned Monday.
The IMF, which has already lent $4 billion to Russia, has made it clear that it will recommend a loan agreement only if the country's lawmakers can approve a credible 1995 budget to bring inflation down sharply. The latest flurry of talks appeared to end in Moscow with no agreement.
Had the bill been passed by the Federation Council, it would still have required the signature of President Boris Yeltsin to become law. Yeltsin has already vetoed a similar bill to raise and index pensions.
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