Russian President Vladimir Putin has delivered his annual address to both chambers of the country's Parliament calling for measures to get the economy back on its feet.

As expected, Putin has commented on both domestic and international issues involving Russia.

Russia's head of state described sanctions as "harmful" to all sides, arguing every time Moscow became "to strong" the West pursued a policy of restraint.

He accused the West of trying to conceal a "coup d'etat in Ukraine with rhetoric about human rights".

Putin underlined Moscow's readiness to respect Ukraine, but was adamant that its policies there were the "right ones". He also defended the Russian move to incorporate Crimea, calling its residents "our people".

The Russian President made clear that, though Russia was open to any international projects, it has to "create its own prosperity" and become more self-reliant. He stressed that the country needed to become competitive and productive and should reduce inflation without suppressing growth. At the same time Moscow will never take the path of self-isolation, he assured lawmakers and other officials present.

We should get out of this trap of zero-growth rate" and "in 3-4 years should reach growth above the world's average rate," he added.

In Putin's words, "special incentives" should be provided for developing industries, tourism and fishery among others, and measures need to be taken diversify the economy of mono-cities built around a single industrial facility.

The head of state insisted it should be easier for small and medium enterprises to win public procurement, but at the same time they should create products "not only competitive inside Russia but also on the international market."

Russia should also "get rid of dependency on foreign technology and products, including drilling equipment" and "should rely on domestic manufacturers in terms of utility companies [and] transport."

"I strongly believe" Russia could modernize its economy and become a source of new ideas changing the world, Putin declared.

During his speech in the Kremlin's St George Hall on Thursday Putin offered full tax amnesty for capitals returning to Russia.

"We need to turn the page of offshore capitals in the history of our country," he announced during the address transmitted live by RT, Pervy Kanal and Russia 24.

He shared his view that investment into the economy should be 25 percent and should work for economic development and not capital flight.

Capitalization of the banks will be increased on the condition it will be used to subsidize the credit rate of industrial projects.

Embezzlement of money allocated to defense should be stopped, since it poses a "threat" to security, he also argued and made clear his country was not to engage in a costly armament race.

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