Thousands of Russians and several foreign dignitaries attend Yeltsin’s funeral.
Officials have repeatedly alleged that such funding aims to provoke mass opposition protests such as those that helped propel pro-Western leaders into power in neighbouring Georgia and Ukraine in recent years.
Police cracked down on a series of opposition protest marches this year, beating some demonstrators and detaining hundreds.
Opposition forces say Putin is strangling democracy through an array of measures to centralise power and increase the influence of large political parties such as his allied United Russia party, which dominates the Russian parliament.
But Putin, in his speech, said it was part of “a revolutionary step modernising the elections system … [it will] help the opposition widen its representation”.
Putin also promised the “second, large-scale electrification of the country”. The first was launched by Vladimir Lenin in 1920.
“By 2020 we must boost power-generation in Russia by two-thirds.
“To achieve that the state and private-sector firms will invest 12 trillion roubles ($467bn).”
Russia will build 26 nuclear power plants over the next 12 years. Hydro-power, roads, rail, ports and airports will all get money, as will a new system of canals to link the Volga and Don rivers, thus facilitating exports from Caspian Sea states.
Canal building was a particular obsession of Josef Stalin and claimed the lives of thousands of forced labourers, but this time around Putin said he wanted business to do the work, with state cash serving as a “catalyst”.
And, in a nod to Nikita Khrushchev’s 1950s drive to build the apartment blocks that still dot Russian cities, Putin vowed to speed housing construction to 100-130 million square metres per year from the 80 million now planned.
Putin said: “It would be great to build no less than one square metre of housing for each citizen of Russia.” The population of Russia, the world’s largest country by area, is 142 million.
Tim Ash, emerging markets economist at Bear Stearns, said: “A lot of emphasis was placed on progress in rebuilding Russia as a great power.”