Russian economy needs structural modernization to cross the threshold between stagnation and development, Minister for Economic Development Andrei Belousov said Monday.

"Utilization of the structural modernization reserves allows us to achieve 6 percent growth in 2014-16 and 7 percent growth in 2017-20," Belousov told the ministry's meeting.

Belousov noted that the threshold between stagnation and growth in Russia lays between 3-5 percent annual growth of the gross domestic product (GDP).

"This is not quantitative but qualitative difference," he said, adding that these paces manifest two principally different models of economy development.

According to the minister, 7 percent annual growth of GDP is the limit the Russian economy can reach in the best conditions imaginable.

In order to achieve that figure, Russia needs to drastically improve business climate, support export, develop competition, implement large-scale infrastructure projects, support cutting- edge technologies, including defense purposed ones, Belousov said.

He also offered to return to the most controversial topic of economic policy, which is to use revenues from oil and gas export the government currently freezes in the reserve fund to tame inflation rate.

President Vladimir Putin advocated employment of the current budget rule that sets the minimum size of the Reserve Fund at 7 percent of GDP. The Economic Development Ministry proposed lowering the minimum to 5 percent of GDP and to use the freed up money for investment.