The government has set up state corporations this year consolidating key assets in the shipbuilding, nuclear power, and aircraft manufacturing sectors.
"State corporations must not monopolize Russia, but without state support it is impossible to restore the economy," Putin said at a meeting with top officials from the Russian Chamber of Commerce and Industry.
Certain industry sectors require state financial backing in order to develop, but when they become competitive, they can be turned into profitable businesses, he said.
The president warned that if state corporations begin to act as monopolies, the government will swiftly take action to bring them in line.
Discussing the Stabilization Fund, set up to accrue surplus revenues from high world oil prices, the president said some of the funds will be spent on pensions and innovation projects. The volume of reserves held in the fund "must be optimal, and that is what they are. We have decided to split oil revenues and start raising living standards," he said.
Finance Minister Alexei Kudrin said earlier that the fund is predicted to reach 3.8 trillion rubles ($155 billion) at the start of next year.
From February 2008, the Stabilization Fund will be divided into the Reserve Fund and the National Prosperity Fund. The Reserve Fund, expected to total 10% of Russia's GDP, will cushion the federal budget in the event of an oil price plunge. Oil and gas revenues above this limit will supplement current budget spending and will go to the National Prosperity Fund.
