Dmitry Medvedev, who led a delegation of Cabinet ministers to Crimea, pledged that Russia will quickly boost salaries and pensions there and pour in resources to improve education, health care and local infrastructure. A special government ministry has been created to oversee Crimea's development.
Russia annexed Crimea from Ukraine in March after a hastily called referendum held just two weeks after Russian forces had overtaken the Black Sea region. Ukraine and the West have rejected the vote.
"People in Crimea mustn't lose anything after joining Russia, they must only make gains," Medvedev said in televised remarks. "People expect us to create conditions for calm and respectable life, confidence in tomorrow, the feeling of being part of a strong country. We must meet these expectations."
He said the government will create a special economic zone in Crimea - a peninsula of 2 million people - that will create incentives for business with lower taxes and simpler rules. He pledged that Russia will seek to develop the region as a top tourist destination and will try to ensure that air tickets are cheap enough to encourage more Russians to visit.
"We must create a new investment history for Crimea, which will be more successful than what it has been," Medvedev said.
Medvedev particularly emphasized the need to ensure a stable power supply. Crimea currently gets about 80 percent of its electricity and a similar share of its water from Ukraine, and power cutoffs last week raised fears that the Ukrainian government could use energy as a weapon to bargain with Russia.
Medvedev said Russia already has made sure that Crimea has enough backup power capacity to ensure an uninterrupted electricity supply. He added that Russia will work on long-term solutions to Crimea's energy problem that could involve linking the region to Russia's power grid or developing local power generation.
He said efforts will also be made to quickly repair water supply infrastructure to reduce loss of water. In the future, Crimea could get water supplies from Russia or create its own water reservoirs.
Russia's defense minister, meanwhile, announced Monday that all Crimean men of conscription age will get a deferral from the draft for one year.
But making no mistake about Russia's view of the strategic peninsula, Deputy Prime Minister Dmitry Rogozin tweeted a photo of himself upon arrival in Crimea with the words "Crimea is ours, and that's that."
In Moscow, the lower house of parliament voted unanimously Monday to annul agreements with Ukraine on Russia's navy base in Crimea. In 2010, Ukraine allowed Russia to extend the lease of the fleet's base until 2042 on an annual rent of $98 million and price discounts for Russian natural gas supplies.
Medvedev has said that Russia had given Ukraine $11 billion in gas discounts in advance and should claim the money back once the lease deal is repealed. If Moscow makes the move, it would further raise pressure on the cash-strapped Ukrainian government that now depends on Western loans to avoid bankruptcy.
The United States and the European Union have slapped travel bans and asset freezes on members of Russian President Vladimir Putin's inner circle for the annexation and warned that Russia will face even more painful sanctions if it tries to invade eastern Ukraine.
Ukraine and the West have also voiced concerns that the buildup of Russian troops near the border with Ukraine raises the threat of an invasion.
U.S. Secretary of State John Kerry raised the issue during his talks in Paris with Russian Foreign Minister Sergey Lavrov on Sunday. The talks dragged on for four hours but didn't produce any visible breakthroughs.
Russia has pushed for Ukraine to become a federation where regions would have broad powers - a clear attempt to preserve its leverage there by relying on Russian-speaking regions in the east and south. The U.S. says it's up to the Ukrainians to determine the structure of their government and Ukraine's new government has rejected Moscow's push for federalization.
But in a sign that Russian-U.S. talks could be inching toward a compromise, a senior Russian diplomat changed his tone Monday while speaking about Ukraine's presidential election on May 25, which the West has urged Moscow to recognize.
Deputy Foreign Minister Grigory Karasin said in remarks carried by Russian news agencies that the Ukrainian vote should be fair and transparent. While Karasin reaffirmed that constitutional reform in Ukraine should remain the top priority, his statement seemed to indicate a softening of Russia's previous stance that the presidential vote was premature and needed to be pushed back to the fall.
Karasin refused to say if Moscow would recognize the outcome of the vote.
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Isachenkov reported from Moscow.
