"We must formulate tough measures to prevent funds allocated to the republic from being used irrationally, or, to put it plainly, prevent embezzlement and corruption," Putin said at a session on social and economic development with the republic's authorities.
The president said federal and regional authorities must ensure social commitments to the population are met.
"I mean by this benefit payments, pensions, and compensations, which require the strictest monitoring," he said.
Putin called for work in key areas to be accelerated so that people could see real progress in the tackling the economic and social problems facing the republic.
Chechen president Alu Alkhanov said at the meeting that the current federal program for Chechnya's restoration had been exhausted.
"The federal target program has exhausted itself, and we must follow another direction," he said, adding that he was ready to submit the relevant report with proposals.
Alkhanov characterized the current situation in the republic as stable.
"All branches of power - judicial, executive, and legislative - are functioning properly, as are the main sectors of social infrastructure," he said.
However, he highlighted such problems as the state of the republic's capital city, and the delays in paying compensation for damaged property.