Russia’s leaders need money to cover increased spending and ratchet up growth rates with investment ahead of the 2012 presidential election, in which Putin has hinted he may stand.

Putin, still seen as Russia’s paramount leader, is to chair a cabinet meeting on Thursday at which is he expected to give a final green light to the plan, which seeks to raise 1.8 trillion roubles ($59 billion) by selling 900 stakes over five years.

Once Putin has given his approval, the sales can move ahead, although some of the most valuable stakes — including 15 percent of leading oil producer Rosneft and a quarter of Russian Railways — will be sold in or after 2012.

But investor confidence in the plan may be undermined by the surprise exclusion of a stake in oil pipeline monopoly Transneft, which was included in a list of potential privatizations published by the Finance Ministry in July.

Transneft preferred shares fell 6 percent in early trade on Thursday after First Deputy Prime Minister Igor Shuvalov was quoted by Russian news agencies on Wednesday as saying the sale of a stake in the company was not being discussed.

Many investors had bet privatization would improve management of the company, which pumps the lifeblood of Russia’s $1.2 trillion economy from oil fields in Siberia to markets in Europe and Asia.

Russia’s budget plunged into the red last year for the first time in a decade, with a deficit of 5.9 percent of gross domestic product, as the government kept spending as tax revenues plunged.

With deficits forecast for another five years, and spending likely to stay high ahead of the 2012 presidential election, Russia is seeking to attract more foreign and domestic investment to drive growth and cover budgetary shortfalls.

The sale of a 15 percent stake in Rosneft would reduce the government’s stake to around 60 percent. The company is worth around $72.4 billion at current prices, putting the potential amount to be raised at nearly $11 billion.

Shuvalov said the privatization plans would include nearly 8 percent of Rushydro and 25 percent of monopoly Russian Railways, which runs the world’s biggest railroad network.

He said the government planned to sell a 30 percent stake in the country’s second-biggest bank VTB in the next three years and might also eventually cut its stake to below control, provided it found quality investors.

Shuvalov said that after 2015 the state was prepared to lose control in Rosneft, shipping company Sovkomflot and flagship air carrier Aeroflot.

The First Deputy PM said the government would also sell a 4 percent stake in Federal Grid Company FSK at a price of no less than 0.5 roubles ($0.016) per share, a premium to the current market price of 0.36 roubles.