Course program

Topic 1. Basic concepts of finance.
Topic 2. The state budget as the main link of the financial system.
Topic 3. Regional and local budgets.
Topic 4. Off-budget funds.
Topic 5. Insurance market finances.
Topic 6. Finance of enterprises and organizations.
Topic 7. Fundamentals of financial control and regulation.
Topic 8. The concept and essence of money.
Topic 9. Money circulation and monetary system.
Topic 10. Fundamentals of monetary policy.
Topic 11. The concept and essence of credit.
Topic 12. Fundamentals of regulation and functioning of the credit system.
Glossary

Lecture 1. Basic concepts of finance

1. The economic essence of finance.

2. History of finance and financial relations.

3. Financial system and financial policy.

Lecture 2. State budget as the main link of the financial system

1. Function of the state budget.

2. General principles for constructing the state budget.

3. State budget expenditures.

4. State budget revenues.

5. Sequestration of expenses.

6. Budget process.

Lecture 3. Regional and local budgets

1. The principle of fiscal federalism.

2. Relations between budgets of different levels.

3. Expenditures of regional and local budgets.

4. Revenues of regional and local budgets.

Lecture 4. Extra-budgetary funds

1. The purpose of the creation and operation of extra-budgetary funds.

2. Fundamentals of regulation of the activities of funds.

3. Types of income and expenses of funds.

4. The relationship of funds with other parts of the financial system.

Lecture 5. Insurance market finances

1. The concept, essence and place of insurance in the financial system.

2. Insurance market participants.

3. Fundamentals of regulation of the activities of insurance market participants.

Lecture 6. Finance of enterprises and organizations

1. Principles of corporate finance.

2. The role of enterprise finance in the redistribution of public goods.

3. Financial regulation of enterprises.

4. Fundamentals of financial analysis of enterprises’ activities and the efficiency of their finances

Lecture 7. Fundamentals of financial control and regulation

1. Functions and essence of financial control.

2. Types and methods of financial control.

3. Financial control sanctions.

4. Fiscal regulation of the economy.

Lecture 8. The concept and essence of money

1. Historical development of money.

2. Functions of money.

Lecture 9. Monetary circulation and monetary system

1. The concept of money circulation.

2. Elements of the monetary system and their interaction.

3. Laws of monetary circulation.

4. Inflation: concept, essence and types.

5. Consequences of inflationary impact on monetary circulation.

Lecture 10. Fundamentals of monetary policy

1. The reasons for the emergence and main postulates of monetarism.

2. Methods monetary regulation economy.

3. Function of the central (issuing) bank.

Lecture 11. The concept and essence of credit

1. The concept of credit.

2. Functions of credit.

3. Loan classification.

Lecture 12. Basics of regulation and functioning of the credit system

1. The concept of the credit system. Banks and banking operations.

2. Regulation of cash and non-cash payments.

3. Securities market.

I. Finance and financial system

Topic 1. Basic concepts of finance

Basic concepts and functions of finance

Finance is a relationship for the creation and redistribution of public goods and wealth. In this sense, they are closely related to money circulation and the sphere of credit. At the same time, money performs various functions, the main of which can be called the function of a universal equivalent, a commodity that serves as a measure of the value and cost of other goods, works and services. In contrast, finance is a relationship, i.e. are a tool for the accumulation and distribution of wealth, which is carried out, among other things, with the help of money.

The essence of finance and its components can be visually represented as follows:

Finance - relationships

Finance is also closely related to credit: the latter creates the basis for expanded reproduction and accelerated accumulation of wealth. Through credit relations, the distribution function of finance is partially implemented and the movement of cash and commodity flows is directed. The healthy functioning of finance largely depends on the state of money circulation and credit: the more developed the monetary and credit system, the more efficiently the accumulation and redistribution of social wealth occurs.

What are the functions of finance? It is customary to distinguish three functions, the essence of which can be represented as follows:

Finance functions
Distribution	Control	Regulatory
In the process of production and trade, there are various incomes- profit of the entrepreneur, income of his employees, trade margins of intermediaries, etc. However, in order to meet the needs of society for development, it is necessary to redistribute part of these and other incomes. This is done by withdrawing (voluntary or forced) part of these incomes, creating funds from these funds and spending the funds for socially useful purposes: education, medicine, construction, defense, etc. For example, the payback period for railway transport or the subway can reach tens of years. This means that not every corporation, firm or bank will be able to afford such investments; The role of investor in such inefficient and low-profit industries is assumed by the state. The construction of a railway and subway requires enormous funds - their accumulation and expenditure is carried out using the distribution function of finance. Where to spend (what to distribute) resources? After all, they are limited, and out of two railway construction projects it is necessary to choose the most optimal one. Such questions can be answered using the control function.	The functioning of society and the interaction of its members is possible thanks to this. That control and management mechanisms exist and are constantly being improved. In this sense, finance is more than “democratic”, since it has numerous mechanisms for monitoring the correct accumulation and distribution of funds and resources. Let us imagine the previously mentioned workers and entrepreneurs from whom all income and savings: the very essence of expanded reproduction and increased profitability is lost. Finance makes it possible to regulate (with the participation of these workers and entrepreneurs) the rate of withdrawal of their funds. Let us also imagine that the funds collected in this way are spent not on the metro, but on waging an unnecessary war or building a dacha for an official. Was the creation of a centralized fund of resources then justified? Most likely no. Therefore, finance also makes it possible to determine the most optimal ways to spend accumulated funds so that the needs of society are satisfied as much as possible.	Let us now imagine that resources have been accumulated and investment paths have been chosen correctly (at least according to formal criteria), for example, the construction of a hydroelectric power station. However, as a result of the construction, it turned out that valuable agricultural land was flooded, and the surrounding areas were experiencing economic stagnation. How can we help people level out the level of development of their area and bring it equal to the national average? How to create modern production that could help slow down the outflow of young people and in the future bring an increase in the living standards of the population of this area? One way is to provide the resources necessary to rectify the current situation, build a computer production plant, provide housing for residents, etc. These resources may be provided by a bank or finance company. But they are unlikely to want to make long-term investments that do not yet promise high returns, especially so. That to a certain extent it is not about making a profit, but about providing assistance to people in need. The provision of subsidies by the state budget in this case characterizes the third – regulatory – function of finance.

What is the basis for finance to perform the functions described? Of course, the basis is the material prerequisite for the accumulation and distribution of resources. The term “social wealth” was used above, which needs to be clarified: the material basis of finance is national income.

National income represents added value, i.e. that improvement of a product, work, service, which at each stage of interaction between producers, intermediaries and consumers is “added” by each of them. In order for an IDL student to receive a RUDN diploma, someone must print it on stamped paper, for which someone, in turn, must make this paper from raw materials (it is not difficult to complete the chain: someone must cut down a tree, process it etc.) At each stage of paper production, each worker “added value”, i.e. invested his labor and resources, which increases the price of the final product. So, the totality of all income that was received by each worker at the stage of processing and selling a product is called national income (it can be calculated by adding all the newly created value and subtracting the value of the resources consumed during its creation).

National income is the basis of finance. Through the two main components of national income - accumulation funds and consumption funds - the accumulation and distribution of society's resources occurs, the equalization of proportions and trends in economic development and control over the correctness of these measures. If national income declines, then this is a sure sign that financial relations it is necessary to adjust (for example, reduce the size of mandatory withdrawals of income from workers and entrepreneurs, or start living “within our means” - reduce expenses and investments in inefficient industries).

Sequestration of expenses

Balancing budgets at all levels is a necessary condition for fiscal policy. The excess of expenses over income constitutes a budget deficit. If there is a budget deficit, priority financing is given to expenses included in the current expenditure budget. In order to balance the budget, limits on the size of the budget deficit may be established. If, in the process of budget execution, the maximum deficit level is exceeded or there is a significant decrease in revenue from budget revenue sources, then a mechanism for sequestering expenditures is introduced, which consists of a proportional reduction in government spending (by 5, 10, 15, and so on percent) monthly for all budget items during remaining time of the current financial year. Protected articles are not subject to sequestration. The composition of protected articles is determined by the Federal Assembly of the Russian Federation, as well as by the representative authorities of the constituent entities of the Russian Federation within the framework of their competence. The development budget deficit is also covered by issuing government loans or using credit resources.

Budget process

The budget process is the activity of government bodies regulated by law in the preparation, consideration, approval and execution of budgets. An integral part of the budget process is budget regulation - partial redistribution of financial resources between budgets of different levels. Regulation of the budget process is a very important procedural part of the functioning of the financial system. This activity consists of several stages, which are briefly discussed below. The preparation of draft budgets is preceded by the development of plans and forecasts for the development of territories and target programs, on the basis of which executive authorities make proposals for item-by-item authorization of budget expenditures. At the same time, calculations are presented to determine budget revenues.

The decision to begin work on drawing up a draft budget is made by the President of the Russian Federation 18 months before the start of the relevant financial year. Based on this decision, the Government will organize stage-by-stage work to draw up a draft budget. During the first three months, a forecast of the socio-economic development of the RSFSR, a consolidated balance of financial resources, the main directions of budget policy are compiled, and target figures for the draft budget for the corresponding period are calculated.

Over the next four months, territorial executive authorities are conducting a detailed study and coordination of socio-economic development indicators and target figures for the draft budget.

Over the next two months, the Government prepares a draft budget message and submits it to the President. The President presents the budget message to the Federal Assembly and sends it for publication in the press. The President's Budget Message includes:

(1) the main indicators of the socio-economic development of the Russian Federation for the corresponding period;

(2) summary financial balance across the territory of the Russian Federation;

(3) the main directions of the budget policy of the Russian Federation;

(4) information on government revenues on the territory of the Russian Federation;

(5) draft budget of the Russian Federation;

(6) draft consolidated budget of the Russian Federation;

(7) assessment of the execution of budgets of the previous and current financial years.

The President delivers the Budget Address to the Joint House in early April of the year preceding the relevant fiscal year.

From the moment the draft budget of the Russian Federation is submitted until May 15, the standing commissions of the Federal Assembly conduct an article-by-item examination of the submitted draft budget and issue conclusions on it. At the joint chamber from May 15 to 25, an article-by-article conclusion on the budget, plans, taxes and prices is heard and a discussion is held on the main directions of budget policy. Over the next three weeks, no later than June 15, resolutions are adopted at separate sessions of the chambers to authorize budget revenues and budget allocations. Budget expenditures are authorized in accordance with the articles of the functional budget classification. In case of discrepancies in the resolutions of the chambers, a conciliation commission is created consisting of eight people from an equal number of representatives of the chambers. The decision of the conciliation commission is approved at a joint meeting of the chambers. A resolution of the Federal Assembly on authorizing the budget may contain permission to make allocations both for the upcoming financial year and for a two- to three-year period.

Bills requiring changes (increases or decreases) in the amount of budget expenditures must be considered in the process of authorizing budget expenditures. If the relevant budget expenditures are not authorized, the entry into force of laws regarding the allocation of appropriations is postponed until a decision is made on authorizing the relevant expenditures in the next financial year.

The Commission on Budget, Plans, Taxes and Prices organizes the process of considering the draft budget, prepares a preliminary conclusion on the draft budget and prepares a draft resolution of the Federal Assembly on authorizing budget expenditures for consideration at a joint meeting of the chambers.

Based on the resolution of the Federal Assembly on authorizing budget expenditures, the President organizes the revision and clarification of the draft budget. The updated draft budget is submitted by the President to Parliament no later than September 15 of the year preceding the next financial year. When considering a draft budget, parliament decides on the following main characteristics:

· the upper limit of the volume of allocations of the current expenditure budget and the development budget (expenditure part);

· limits of budget imbalance (surplus or deficit in the form of absolute value or percentage of projected revenues).

After approval of the main characteristics of the draft budget, budget allocations are approved by item in accordance with the functional budget classification. Within the approved budget items of this classification, any type of appropriation in an amount equal to or exceeding 1 billion rubles must be indicated on a separate line.

From September 15 to October 15, parliamentary commissions adopt opinions on the above main characteristics and on individual articles of the submitted draft budget. Based on the conclusions adopted by the parliamentary commissions, the commission on budget, plans, taxes prepares a consolidated conclusion on the draft budget and submits it to parliament. From October 15 to November 30, the Federal Assembly approves the budget line by line in the form of a law.

The budget is approved at a joint meeting of the chambers. The report on the budget is presented by the President or another official on his behalf.

The co-report on behalf of the parliament is presented by the relevant parliamentary commission. The decision to approve the main characteristics of the budget and the items of the functional classification is made by a simple majority of votes. Proposals for specific amounts of appropriations contained in the final version of the draft budget presented by the President are put to a vote.

If individual articles of the submitted draft budget are not approved, the Federal Assembly holds a second vote on the redistribution of budget allocations within the upper limit of the volume of budget allocations. The decision is made by a simple majority of votes.

Within two weeks, the President is obliged to sign the law or return it to parliament with comments for reconsideration. The President has the right of a suspensive veto (rejection and return for consideration and approval in parliament) of certain articles of the state budget. In case of use

The President has the right to veto, the issue on this article is submitted to a joint meeting of the chambers, it must be considered within a week. To override a veto, a parliamentary decision made by a simple majority of votes is required. If he agrees with the veto, the President must adopt an appropriate decree on appropriations under this article. During the period before the final veto decision is made, the Government has the right to use monthly budgetary allocations for the controversial item in the amount of 1/12 of their value in the previous financial year.

Every year in May of the following reporting year, the government submits to Parliament a reporting report and a report on the execution of the republican budget for the previous financial year. The budget execution report is reviewed and approved by parliament by a simple majority of votes.

Questions:

1. List the functions of the state budget.

2. Describe the general principles of constructing the state budget.

3. What relates to the expenditure budget and the development budget.

4. Remit federal taxes.

Article 9. Independence of budgets

The republican budget of the RSFSR, the republican budgets of the republics within the RSFSR, the budgets of national-state and administrative-territorial entities are independent.

The independence of budgets is ensured by the presence of their own sources of income and the right to determine the directions of their use and expenditure.

Budgets’ own sources of income include:

1. revenue sources established by law for each budget level;

2. deductions from regulatory income sources;

3. additional sources established independently by the Supreme Councils of the republics within the RSFSR, local Councils of People's Deputies within the framework of the legislation of the RSFSR. Independence of budgets means, in addition to having its own sources, also the right to determine the directions of their use and expenditure. Thus, the independence of budgets is the main and most important element of fiscal federalism. Another element is the precise procedure for budget relationships.

Article 1

General principles of taxation and fees, determining the types of tax payments, the amount of deductions from regulatory income sources, standards and the mechanism for distributing income between the federal and _________ budgets are determined by law Russian Federation.

Article 2

The formation of the ______________ budget, as well as the relationship between the federal budget and the ______________ budget, are carried out in accordance with the legislation of the Russian Federation. State authorities _________, within their competence, determine issues of budget structure and budget process in _______________.

Article 3

Executive authorities _______________ ensure timely and complete transfer of received taxes and other payments to the federal budget in accordance with the current legislation of the Russian Federation.

Article 4

In order to speed up settlements between budgets and reduce counter financial flows, financing federal programs and organizations located in the territory of _______________ and financed from the federal budget within the approved limits and estimates federal bodies executive power through the Main Directorate of the Federal Treasury of the Ministry of Finance of the Russian Federation, is carried out by direct transfer of amounts from the expenditure account of the territorial department of the federal treasury to _________________ within the limits of federal budget revenues collected in the territory of ________________. [hereinafter the final provisions - entry into force of the Agreement, validity period and extension procedure, etc.]

As for the delimitation of tax payments between budgets, this is usually achieved either by assigning different taxes to different budgets, or by assigning part of the collected taxes to lower-level budgets. Thus, in Russia, income tax “has two rates” - 13% goes to the federal budget, and from 22 to 30% goes to the regional budget. Also fixed are “double” rates for excise taxes, VAT, income tax, and payments for the use of certain resources.

In addition to the division of tax revenues, relations between budgets can be built in the image and likeness of civil legal relations. This means that in the event that a lower budget incurs any expenses for a higher budget, the latter reimburses these expenses according to the information on the expenses incurred that is submitted quarterly.

In exceptional cases, if local budget funds are insufficient to reimburse expenses, upon notification from financial authorities, the Ministry of Finance of the Russian Federation makes an advance transfer of funds for these purposes with their subsequent offset according to the established reporting submitted by financial authorities. Advance receipts are reflected in the accounting of budget execution in financial authorities as funds received from the republican budget of the Russian Federation. Thus, the general state budget can reimburse expenses for the maintenance of public authorities, expenses related to ensuring the activities of people’s deputies, reimbursement of expenses for paying the difference in interest rates, compensation for damage caused to citizens, compensation for damage and expenses for paying compensation to rehabilitated citizens, payment of compensation victims of political repression, costs associated with storage, repair, forwarding, transportation of confiscated property and treasures that are subject to transfer to federal ownership, costs of paying benefits and compensation and other costs.

The basis of the relationship between budgets of various levels is the need to achieve the so-called minimum budget, i.e. carried out in accordance with the consolidation, in accordance with social policy, of certain guarantees for residents of a given region. The minimum budget represents the estimated volume of income of the corresponding consolidated budget of a lower territorial level, covering the minimum necessary expenses guaranteed by the relevant higher authorities, part of which, in the event of insufficiency of the estimated volume of assigned income, is covered by deductions from regulatory revenues, subsidies and subventions by decision of a higher representative authority.

The expenditure portion of the minimum budget is calculated according to single or group minimum social and financial norms and standards established by a higher representative body of government on the basis of current acts of legislation within the limits of its financial capabilities. The development of minimum social and financial norms and standards submitted for approval by Parliament is carried out by the Government.

The expenditure portion of the minimum budget is determined:

a) the amount of costs included in the budget of current expenses, taken into account by higher authorities in calculations for the budget of the year preceding the planned one (in comparable conditions), taking into account the increase (decrease) in these expenses caused by:

· the amount of costs agreed upon with a higher authority in accordance with the procedure established by law in connection with changes in the composition of objects subject to budget financing;

· decisions of higher authorities on changes in social and financial norms and standards;

· changes in the price index and tariffs according to calculations of higher executive authorities, carried out in the prescribed manner;

b) the minimum required amount of costs included in the development budget of a given national-state or administrative-territorial entity.

And finally, the relationship between budgets is built on the basis of respect for the rights and obligations established by law or agreement. This is guaranteed by the fact that public authorities are obliged to compensate in full the damage caused to legal entities and individuals as a result of the adoption by these bodies of decisions on budgetary issues in excess of their competence. The damage caused is subject to compensation from the appropriate budget based on a decision of a court or arbitration court.

Topic 4. Extra-budgetary funds

Insurance market participants.

All participants in the insurance market can be roughly represented by the following groups:

Buyers	Intermediaries	Sellers	State
Policyholders	Insurance agents and insurance brokers	Insurers	Supervisory authorities
Persons who need or are required by law to insure their life, property or liability. These are those whose financial resources are “withdrawn” by the insurer and transferred to other segments of the financial market	Persons who bring supply and demand together. Insurance agents act on behalf of the insurer, and insurance brokers act on their own behalf, but both act on behalf of the insurer.	Duly licensed subjects of the insurance market are, in the overwhelming majority of cases, legal entities (including the state). They are the ones who accumulate the funds of policyholders and place these funds in reliable and liquid assets	We are talking about those cases when the state does not participate in insurance relations as a representative of one of the three previously listed groups. This refers to the participation of the state in regulating the insurance market, which is carried out in various ways (they will be discussed below)

Table 1

The sign “Z” denotes costs (for the acquisition of assets and increasing working capital), taken into account with a “minus” sign; under the “P” sign - proceeds (from their sale and reduction of working capital), accounted for with a “plus” sign.

In this case, line (5) = (1) + (2) + (3) + (4) f1(t) = line (7) = (5) + (6).

Liquidation refers to the “Step T” column. Calculation of the net flow of real money at the stage of liquidation of the object - see table 4 and the explanations thereto.

Real cash flow from operating activities includes the following types income and costs (see table 2):

table 2

№	Indicator name	Indicator value by steps
		Step 0	Step 1	Step 2	...	Step T
	Volume of sales
	Price
	Revenue (=1x2)
	Non-operating income
	Variable costs
	Fixed costs
	Depreciation of buildings
	Equipment depreciation
	Interest on loans
	Profit before taxes
	Taxes and fees
	Projected net income
	Depreciation (=7+8)
	Net inflow from operations (=12+13)

In this case, line (12) = (10) - (11), line (13) = (7) + (8), φ2(t) = [φ+(t)] = line (14) = (12) + (13), and line (10) is equal for the project as a whole: line (10) = (3) + (4) - (5) - (6) - (7) - (8), for the recipient line (10) = (3) + (4) - (5) - (6) - (7) - (8) - (9).

Flow of real money from financial activities includes the following types of inflows and outflows of real money (see Table 3):

Table 3

At the same time, for the project as a whole:

fz(t) = line(6) = (1) + (2) + (3) - (4), (3.5), and for the recipient’s free funds:

fz(t) = string(6) = (1) + (2) + (3) - (4) - (5).

The net liquidation value of the object (the net flow of real money at the stage of liquidation of the object) is determined on the basis of the data given in table 4.

Table 4

№	Name	Earth	Buildings, etc.	Machinery, equipment	Total
	Market price
	Costs (Table 1)
	Accrued depreciation
	Book value at T-step
	Liquidation costs
	Capital gains		No	No
	Operating income (loss)	No
	Taxes
	Net salvage value

The procedure for assessing the liquidation value of an object when it is liquidated at the T-th step (the first step beyond the service life limit established for the object) is as follows.

The market value of the elements of the object is assessed independently, based on the changes that are expected in the area of ​​its location. The book value of the object for step T is determined as the difference between the initial costs (line 2) and accrued depreciation (line 3), i.e. line 4 = line 2 - line 3. In this case, the amount of depreciation is determined from table 2. The increase in the value of capital (line 6) refers to land and is defined as the difference between the market (line 1) and book value (line 4) of the property. Operating income (losses), shown on line 7, refers to the remaining elements of capital, which are sold separately, i.e. line 7 = line 1 - (line 4 + line 5). The net liquidation value of each element is the difference between the market price and taxes that are charged on the increase in the residual value of capital and income from the sale of property, i.e. line 9 = line 1 - line 8.

The state budget is the leading link in the financial system and the main financial category. The budget brings together the main financial categories(taxes, government credit, government spending) in their action. The budget carries out the constant mobilization of financial resources and their distribution.
The state budget is the main financial plan of the state for the current year, which has the force of law. Approved by legislative bodies - parliaments. In terms of material content, the state budget is a form of formation and use of a centralized fund of state funds, and in terms of socio-economic essence, it is the main instrument for the redistribution of national income.
The budget is a form of formation and expenditure of a fund of funds intended to financially support the tasks and functions of the state and local government.
The state budget is the main instrument for the redistribution of national income and GDP. About 20% of GDP is redistributed through the budget. The federal budget is widely used for intersectoral and territorial redistribution of financial resources.
Through expenses and taxes, the budget acts important tool regulation and stimulation of the economy and investment, increasing production efficiency. Governmental support turns out to be advanced sectors of the economy - aircraft manufacturing, space programs, nuclear industry, power engineering. And also in modern conditions, the highest priorities are the agro-industrial, fuel and energy, military-industrial complexes, transport and housing and communal services.
Social focus is important budget funds. In social policy, support is provided to pensioners, disabled people, students, low-income families, as well as military personnel who performed job responsibilities in the Chechen Republic, etc.
With the help of the state budget, state authorities receive financial resources for the maintenance of the state apparatus, the army, the implementation of social events, the implementation of economic tasks, i.e. for the state to perform its assigned functions.
The state budget in countries with market economies performs the following main functions:
redistribution of gross domestic product and national income;
government regulation and economic stimulation;
financial support of the budgetary sphere and implementation of the state’s social policy;
control over the formation and use of a centralized fund of funds.
The state budget revenues of countries with developed market economies consist of 80-90% of taxes.
Government budget expenditures in countries with developed market economies are divided into the following five groups:
1) military;
2) intervention in the economy;
3) social goals;
4) maintenance of the state administrative apparatus;
5) providing subsidies and loans to developing countries.

Closely related to the concept of “money” is another concept - “finance”.

Finance are the most important element of the economic mechanism modern society. This is a general economic indicator, meaning both money, financial resources, considered in their creation and movement, distribution and redistribution, use, and economic relations determined by mutual settlements between business entities, cash flow, money circulation, and use of money.

The essence of finance is economic relations that arise in the process of movement of funds and funds. Subjects(carriers) of financial relations are: state, firms, various associations, organizations and individual citizens. About use cash funds certain mutual financial relations develop between them.

Thus, finance is an integral part of monetary relations. However, not every monetary relationship is a financial relationship. Finance differs from money both in content and in the functions it performs. In modern society, finance performs four main functions: distribution, control, accumulating and regulating.

Distributive function finance is manifested in the fact that they actively participate in the distribution and redistribution of gross domestic product and national income between participants in production, economic sectors, regions, spheres of material production and the socio-cultural sphere. The distribution function is manifested in the primary distribution of the value of the created product and the formation of primary income and cash flows to various spheres and sectors of the economy.

Financial distribution methods apply to individuals and legal entities who are participants in the entire reproduction process, to all levels of economic management. In Russia they manifest themselves at the federal level, the level of federal subjects, and at the local level.

Control function consists in control by society over the production, distribution and circulation of the total product. Through the control function you can find out:

a) how do proportions in the distribution of funds affect the state of the economy and economic agents;

b) how timely financial resources are available to different business entities;

c) are they used economically and efficiently, etc.

Accumulating function finance is to concentrate funds and create the material basis for the existence and functioning of the state.

Regulatory function finance helps stimulate the activities of economic entities and subjects of financial relations with the aim of developing production and solving social problems.

Institutes that organize financial work in society, form country's financial system. The financial system includes: government financial management bodies (macro level); financial services of enterprises, institutions and organizations (micro level); specialized financial institutions or financial intermediaries.

The totality of economic relations regarding the formation and use of target monetary funds is financial system, the basis of which is budget.

A budget is an official, accepted list, table, statement of income and expenses of an economic entity for a certain period of time, usually a year. The budget is drawn up to account for the amount of money available and spent and their mutual correspondence. The budget is the main tool for checking the balance and consistency of the income and expenditure of economic resources. If the expenditure side exceeds the revenue side, then the budget is reduced to a deficit (disadvantage). The excess of income over expenses forms a positive budget balance (positive balance), or surplus.

The types of budgets are different: state, republican, regional (district, regional, regional), local (city, village). That is why in the financial system there are: state and municipal finances; finance of enterprises, organizations, institutions; household finances.

plays an important role in the economic life of any country state budget. He is the core of the state's financial system. What is the state budget?

The state budget is an estimate, a list of the probable income and expenses of the state during a certain period, usually a year, providing the conditions for the functioning of the national economy. The state budget, like any budget, consists of two main parts: revenue and expenditure: See presentation

Revenue part presents a list of sources of income, cash receipts to the budget, indicating the channels of receipts and the total amount of income.

Expenditure part- this is a list of areas for spending budget funds indicating specific amounts of expenditure. It is usually customary to draw up annual budgets, in which income and expenses for individual budget items are calculated in total terms for the year

The relationship between government revenues and expenditures is reflected in balance sheet. A government budget surplus occurs when revenue exceeds expenditure. Conversely, if expenses exceed government revenues during a certain period (usually a year), then budget deficit. A budget deficit is not dangerous if it is due to the effective investment of public funds in the economy, which in the future will offset costs through increased efficiency and profitability of production.

Unfortunately, the significant deficit of the Russian state budget in the 1990s is the result of the economic crisis. In this regard, there is an urgent task of achieving a higher level of budget balance, primarily by reducing government spending on almost all items. Only as a result of stabilization of the economy, recovery and increase in its efficiency in the future is it possible to improve finances and reduce the income and expenditure of the Russian budget without a deficit.

Sustained budget deficits financed by debt create public debt. Public debt is the sum of past years' budget deficits minus budget surpluses; this is what the government borrowed to cover the budget deficit. Public debt is divided into internal and external.

Internal public debt is the internal debt of the state to organizations, enterprises and the population, formed in connection with the attraction of their funds for the implementation of government programs and orders, the issuance of paper money, government bonds and other government securities, as well as due to the presence of deposits of the population in state banks.

External public debt is the debt of the state to organizations and citizens of foreign countries or international financial institutions (World Bank, International Monetary Fund, etc.). To repay it and pay interest, a refinancing procedure is used. In this case, old debts are settled with newly issued government securities.

External debt is debt in foreign currency. In Russia at the beginning of 2001 it was about 140 billion dollars. The repayment of this debt occurs through the transfer of goods and financial resources to other countries. In order to pay off the external debt, the country must reduce imports and increase exports of goods, while foreign exchange earnings from exports go not for development purposes, but for debt repayment, which slows down growth rates and reduces living standards.

Measures to reduce public debt are: reducing military spending; reduction in the size of the armed forces; conversion of military production; privatization or closure of low-profit public sector enterprises; reduction in other government spending.

Since the main source of funds entering the state treasury are taxes (in state revenues they account for 80 to 90% of all incoming funds), they should be discussed separately.

The concept and structure of the state financial system. Finance- these are economic relations that arise in the process of formation, distribution and use of funds of funds. In the economic life of society, monetary relations constantly arise:

• between the state and enterprises (organizations) in the form of paying taxes to budgets, deductions to various funds, providing benefits, applying sanctions;
• enterprises and organizations regarding the conclusion of business contracts, payment of penalties, fines, penalties, bonuses for fulfilling special customer requirements;
• enterprises and employees when calculating and issuing wages, bonuses, withholding taxes, paying trade union dues, receiving benefits;
• the state and individual members of society when paying taxes, rent, insurance payments;
• individual parts of the budget system;
• states when receiving loans.

In other words, in each state there are several areas of financial relations, each of which has its own specific features, manifested primarily in the forms and methods of mobilizing financial resources and their use. For example, for enterprises in the real sector, financial resources are formed from profits, depreciation charges, proceeds from the sale of securities, etc.

The state budget is formed mainly through taxes from enterprises and the population. The channels for channeling financial resources between enterprises and the state budget are also not the same. Consequently, each area of ​​financial relations is, to a certain extent, an independent link in the financial system. Nevertheless, all links are closely interconnected and form a single financial system. Thus, the financial system is a set of separate but interconnected spheres and links of financial relations. The financial system of the Russian Federation includes the following areas: public finance, municipal finance, finance of enterprises (organizations), finance of citizens.

The most important links in the financial system are state and municipal finances, which provide state authorities and local governments with funds to carry out the functions provided for by the Constitution of the Russian Federation and other legislative acts. State and municipal finances cover that part of monetary relations relating to the distribution and redistribution of GNP, which is accumulated in the hands of state authorities and local governments to cover the costs necessary for the state and municipalities to perform their functions. Public finance include federal finances and finances of the constituent entities of the Federation. Municipal finance are allocated to an independent structural level, since local government is separated from state system management In the structure of state and municipal finances, the main element is the federal and territorial budgets. Financial relations between the central and territorial authorities in Russia are built on the principle of budgetary federalism, which means financial self-sufficiency of administrative units through appropriate taxes.

An important element in the system of state and municipal finances are state extra-budgetary funds for social and economic purposes, which are used for social protection citizens and economic development. The allocation of such funds as separate links in the financial system is due to the need to provide guarantees for the intended use of funds generated mainly through targeted mandatory contributions.

The state social extra-budgetary funds of the Russian Federation include the Pension Fund of the Russian Federation, the Social Insurance Fund of the Russian Federation, the Mandatory Fund health insurance RF.

These funds accumulate funds for the implementation of social guarantees: state pension provision, provision of free medical care, support in case of disability, during maternity leave, sanatorium and resort services, etc.

A specific element of state and municipal finance is state and municipal credit, which is one of the sources of covering the budget deficit in the form of issuing state and municipal securities.

The finances of enterprises (organizations) occupy a special place in the country’s financial system. This is a set of monetary relations associated with the formation and distribution of cash income and savings of business entities and their use for various purposes: fulfilling obligations to the financial and banking systems, financing the costs of social services and material incentives for workers, paying dividends, paying bills, rent and etc. The finances of enterprises (organizations) are the leading link in the financial system, since it is at the level of enterprise finance that the formation of sources of financial resources occurs.

The next area of ​​the country’s financial system is the finances of citizens, which represent monetary relations arising in the process of formation, distribution and use of funds between citizens and other subjects of a market economy (government bodies, banking system, financial system, business entities, other citizens). Citizens' finances are associated with the formation of citizens' incomes and their use for current expenses, acquisition of property, and creation of a financial portfolio.

State budget and its functions. All areas and links of the financial system are closely interconnected and constantly interact. The central link of the financial system is the state budget. The word “budget” is translated as “bag and its contents.” The budget was the name given to the monetary portfolio of the Minister of the Treasury, so from an economic point of view, the budget can be interpreted as the state of the state’s “cash bag”. Distinctive feature state budgets is their increasing role in the redistribution of national income. The volume of this redistribution amounts to 40-50% of GDP.

The state budget can be viewed from two positions: as an economic category and as a financial plan. In its economic essence, the state budget represents the monetary relations that arise between the state and individuals and legal entities regarding the redistribution of national income in connection with the formation and use of the budget fund. As a financial plan, the state budget consists of income and expenses. Being the main financial plan of the state, the state budget gives the authorities real economic opportunity exercise of power. It reflects the size of the financial resources required by the state and thereby determines the tax policy in the country. The budget fixes specific areas for spending funds, redistributing national income and internal gross product, which allows it to act as an effective regulator of the economy.

The state budget appeared with the emergence of the state. However, only with the coming to power of the bourgeoisie did the budget take the form of a document approved by the legislative body. The origin of the budget and its approval process is England. After the revolution of 1686-1689. the king was forced to renounce the right to impose taxes without the consent of parliament. State expenses were divided into two parts: civil expenses and military expenses. Military expenses were approved annually, and civil expenses (expenses according to the civil list) - only if the king made changes to them. In the process of limiting royal power, only the costs of maintaining the king and the royal court remained on the civil list.

In Russia, the first list of state revenues and expenses was compiled in 1722 for 1723. Since 1802, these lists began to be compiled annually, but only in 1811 did the compilation of the Russian budget begin. However, this budget was of a formal nature, since each ministry disposed of the funds allocated to it without control and had its own sources of income. Only since 1862, as a result of the development of the budget structure, the funds of ministries began to be concentrated in the hands of the state on the principle of unity of the treasury. The Russian state budget was not published and was kept strictly secret. Even the members of the State Council did not know the actual state of the Empire's finances.

Since 1894, Russian government spending began to be divided into ordinary and emergency. The latter included military expenditures, railway maintenance costs and loans. From that moment on, the Russian budget became public.

Principles of state budgeting. During the development process, four principles were developed that the budget must comply with:

• completeness;
• unity;
• reality (truthfulness);
• publicity.

The completeness of the budget means the inclusion in the budget of all income and expenses of government bodies. From the point of view of completeness, a distinction is made between the gross budget and the net budget. The gross budget includes all gross revenues of the state and gross expenses, the net budget includes only net expenses and income. For example, expenditures on state-owned enterprises are included in the gross budget, but the net budget reflects only the difference between income and expenditure.

Budget unity lies in both a uniform budgeting procedure and unified budget documentation. There must be one budget that reflects all government revenues and expenses. In addition, unity presupposes the comparability of parts of the budget with each other. For this purpose, a single budget classification is used, i.e. grouping budget income and expenses according to homogeneous characteristics.

Currently, four main types of budget classification of budget income and expenditures are used:

1. departmental (administrative, ministerial);
2. subject (industry, real, functional);
3. economic;
4. mixed (combined).

Departmental classification groups income and expenses by ministries and departments; subject - by branches of public administration: military expenditures, healthcare, education, etc.

Economic classification groups expenses according to economic characteristics: investments, salaries, pensions, loans, etc. Mixed classification comes down to grouping expenses in a checkerboard pattern: according to two types of budget classification in vertical and horizontal directions (for example, horizontally - by economic characteristics, and vertically - by enterprises).

The veracity (reality) of the budget presupposes that all amounts of budget income and expenditures must be justified and correct. Budget transparency involves open discussion of the budget and its approval by the country's legislature.

Functions of the state budget. The state budget performs the following functions:

a) distribution. This function of the budget is manifested through the formation and use of centralized funds of funds at the levels of state and territorial government and management. In developed countries, up to 50% of GDP is redistributed through budgets at various levels.

b) stimulating. With the help of the budget, the state regulates the economic life of the country, economic relations, directing budget funds to support or develop industries and regions. By regulating economic relations in this way, the state is able to purposefully increase or restrain the rate of production growth, accelerate or weaken the growth of capital and private savings, and change the structure of demand and consumption. This is where the stimulating function of the budget manifests itself.

c) social. This function consists of accumulating funds in the budget and using them to implement social programs aimed at developing healthcare, culture, education, and supporting the poor.

d) control. This function of the budget presupposes the possibility and obligation of state control over the receipt and use of budget funds.

Budget income and expenses. The redistribution of gross domestic product through the budget has two interconnected stages that occur simultaneously and continuously:

1. generation of budget revenues;
2. use of budget funds (budget expenses).

Budget revenues- these are funds received free of charge and irrevocably in accordance with the legislation of the Russian Federation at the disposal of state authorities of the Russian Federation, state authorities of constituent entities of the Russian Federation and local governments. Budget revenues can be tax and non-tax in nature. The main source of tax revenues are newly created value and income received as a result of its primary distribution (profit, wages, added value, loan interest, rent, dividends, etc.), as well as savings. Taxes account for 80-90% of the central budget revenues of various states. Non-tax budget revenues are generated as a result of either economic activity the state itself, or the redistribution of income already received across levels of the budget system. Non-tax revenues include:

• income from the sale of state and municipal property;
• income from foreign economic activity;
• income from the sale of government reserves.

Budget expenses— these are funds allocated to financially support the tasks and functions of the state and local government.

State budget expenditures in countries with developed market economies include the following main groups of expenditures:

• for national defense;
• economic development;
• socio-cultural needs;
• maintenance of the state administrative apparatus;
• servicing public debt.

Budget expenses are mostly irrevocable. Only budget loans can be provided on a repayable basis. The structure of budget expenditures is established annually in the budget plan and depends, like budget revenues, on the economic situation and public priorities.

Budget device and budget system. The budget structure characterizes the organization of the budget system, the principles of its construction and operation; it is established and regulated by legislative acts that define the rights of central and local authorities to draw up, approve and execute budgets.

In addition, the budget structure provides for the distribution of income and expenses between individual types of budget. The budget structure is determined by the state structure. In unitary states there are two levels of the budget system (state budget and local budgets), in federal states there are three levels (for example, in the Russian Federation these are also the budgets of the constituent entities of the Russian Federation). The budget structure of the Russian Federation includes three levels:

1. federal budget;
2. budgets of the constituent entities of the Russian Federation;
3. local budgets.

The budget system of the Russian Federation includes the federal budget, 21 republican budgets of the republics within the Russian Federation, 55 regional and regional budgets and the budgets of the cities of Moscow and St. Petersburg, one regional budget of the autonomous region, 10 district budgets of autonomous okrugs and about 29 thousand local budgets (district , city, town and rural budgets). The budgets included in the budget system of the Russian Federation are independent and are not included in each other, i.e. budgets of constituent entities of the Russian Federation are not included in the federal budget, and local budgets are not included in regional budgets.

Consolidated budget of the Russian Federation is a set of budgets at all levels of the budget system of the Russian Federation. It includes the federal budget and the consolidated budgets of the constituent entities of the Russian Federation. The consolidated budget is not approved by the legislature. This is a statistical summary of budget indicators that characterize income and expenses - sources of funds and directions for their use for the territory as a whole and for individual constituent entities of the Russian Federation. Consolidated budgets are needed:

The absolute value of external debt in ruble terms increased from year to year and by the beginning of 2003 reached the amount of 3925.4 billion rubles, which is 27.9 times more than in 1993. This dynamics was mainly due to the smooth growth of external debt in dollar terms and significant annual depreciation of the Russian ruble.

Relative to GDP, the external debt burden steadily decreased and in 1997 amounted to 29.2%, which is 32.1 percentage points less than the 1993 level. This trend was disrupted in 1998 by the devaluation of the ruble after the decisions of August 17, and by the beginning of 1999 External debt amounted to 120.5% of GDP. In 1999, there was a decrease in the debt burden by 29.7 percentage points due to a significant lag in the growth rate of the US dollar in rubles from the inflation rate (hence, the growth rate of GDP at current prices) and Russia’s strict adherence to the schedule for repayment and servicing of external debt .

The high burden of Russian debts gave rise to a lot of difficulties, primarily budgetary ones. State expenditures on debt repayment and servicing increased from year to year and diverted an increasing share of budget funds. For example, from 1993 to 1998 they increased in nominal terms by 45.1 times, absorbing 33.6% of all federal budget expenditures in 1998. In 1999, interest expenses due to the ongoing innovation in GKO-OFZ approached the level of 1997 and amounted to 26.7% of federal budget expenses. This negative experience was taken into account when forming economic policy for the next decade.

As a result, the Russian economy not only reduced the amount of both internal and external debts, but also entered the era of state budget surpluses for the first time. As of January 1, 2007, internal public debt, expressed in government securities, amounted to 1028.1 billion rubles, public external debt - $52 billion. Thus, currently the total public debt of the Russian Federation (external and internal) does not exceed 10% of GDP level. Socio-economic consequences of public debt.

Public debt can have a positive and negative impact on socio-economic processes. The positive significance of government borrowing is that they are mainly a non-inflationary source of financing the budget deficit of government bodies at various levels. This follows from the fact that the formation of additional financial resources within government structures through government borrowing does not entail an increase in aggregate demand, but only changes its structure. The purchase of government securities by individuals and legal entities means a transfer of demand from these entities to the executive bodies of state power. Government structures, by providing government loans to promising enterprises and guarantees for loans and credits attracted by effective business executives, can help accelerate the socio-economic development of the country. State loans and guaranteed loans were the source of railway and industrial construction in Russia in the second half of the 19th century. They proved themselves to be effective financial instruments during the NEP years. By issuing debt obligations intended for purchase by individuals and legal entities, the state influences the process of organizing the savings of the population and investing temporarily free financial resources by business entities. Typically, government securities are the most reliable and highly liquid, so they are readily purchased by individuals and legal entities. The population receives a convenient and profitable way to organize their savings, and business entities receive highly liquid assets that generate income. By drawing money into the treasury through the government debt market, the state can help normalize money circulation in the country.

With a reasonable organization of relations for the formation and servicing of public debt, the executive branch can effectively distribute the tax burden over time between generations of the country's population. This method of distributing the tax burden gives positive results when financing the construction of long-term facilities that serve for decades using borrowed funds.

In this case, the financial burden falls not on one, but on several generations, since the repayment of the principal amount of the debt and the payment of interest on it are stretched over time.

Mutual debt obligations different countries are a factor in strengthening international cooperation and mutual understanding. This is facilitated by intergovernmental loans, borrowing from international financial organizations and in international financial markets, external government loans. With the high development of international debt relations, everyone becomes economically interested in general stability in the world.

The negative aspects of the influence of public debt on socio-economic processes are manifested primarily in the fact that with excessive development of the public debt market, the government limits investment opportunities in the national economy. This happens because, attracting borrowed funds, the state withdraws from the market part of the financial resources that could be used for investment in the real sector of the economy. The negative impact of government debt increases when yields are excessively high government papers. Under these conditions, investors give an unconditional preference to investing in government debt obligations over making real investments. In addition, the high yield of government securities (along with other factors) leads to an increase in the bank interest rate for credit resources, which makes a bank loan ineffective for an entrepreneur.

The state's excessive involvement in borrowing operations contributes to a significant diversion of budget funds from the needs of economic and social development. A high level of borrowing, if it is also combined with a high yield on government securities, leads to large budgetary expenses for servicing government debt. This is seen as a negative point in the development of public finances. The passion for external borrowing leads to the fact that the state not only becomes overly dependent on the state of domestic finances on the state of international finances, but also loses political independence. Finally, the funds raised through government borrowing are taxes taken in advance.

Sooner or later, debts must be repaid and interest paid on them. And part of the long-term debt is transferred to future generations. If we are not talking about the construction of long-term social facilities or production enterprises using borrowed funds, then solving current problems through loans and credits falls on the shoulders of future citizens of the country.

Public debt management. Public debt management is understood as a set of government measures to pay income to creditors and repay loans, change the terms of already issued loans and issue new ones. In the process of managing public debt, the following tasks are solved:

1. maintaining the amount of internal and external public debt at a level that ensures the preservation of economic security countries, the fulfillment by authorities of their debt obligations without significant damage to the financing of socio-economic development programs;
2. minimizing the cost of debt by extending the borrowing period and reducing the yield of government securities;
3. maintaining the reputation of the Russian state as a first-class borrower based on the impeccable fulfillment of financial obligations to investors;
4. maintaining stability and predictability of the government securities market;
5. achieving effective and targeted use of borrowed funds, government loans and guaranteed loans;
6. ensuring timely repayment of government loans and payment of interest on them;
7. diversification of debt obligations by borrowing terms, profitability, forms of income payment and other parameters to meet needs various groups investors;
8. coordination of actions of federal bodies, bodies of the constituent entities of the federation and local governments in the government debt market.

Strategic and operational management of public debt. Prospective issues of development of public debt are within the competence of the Federal Assembly, the President of the Russian Federation and the Government of the Russian Federation, legislative (representative) and executive authorities of the constituent entities of the Russian Federation. Executive bodies prepare draft federal and regional laws. The Federal Assembly of the Russian Federation and the legislative bodies of the constituent entities of the Russian Federation accept them, and the President of the Russian Federation and the heads of regional administrations reject or sign them. Every year, in the law on the federal budget, the Federal Assembly and the President of the Russian Federation establish maximum volumes of state internal and external debts; sources of internal financing of the budget deficit, including income from the issue of government securities; size limit external borrowings; maximum amounts of government loans to foreign states and CIS member states; directions of use, terms of provision and maximum amounts of budget credits (loans) to legal entities and constituent entities of the Russian Federation; upper limits of state internal and external guarantees.

On the recommendation of the Government of the Russian Federation, the State Duma approves the program of government external borrowings and government loans provided by Russia and the program of providing guarantees of the Government of the Russian Federation.

The President of the Russian Federation and the Government of the Russian Federation develop and approve socio-economic programs that can directly affect various aspects of the development of public debt. For example, by its Resolution No. 1003 of August 13, 1997, the Government of the Russian Federation approved the Program for Reducing the Federal Budget Deficit for 1998-2000. The program is aimed at limiting the negative impact of the burden of servicing public debt on economic growth and the regulatory capabilities of the state in the financial market.

Operational management of public debt is carried out by the Government of the Russian Federation and its special body - the Ministry of Finance of the Russian Federation (Ministry of Finance of Russia), as well as the Central Bank of the Russian Federation and Vnesheconombank. These bodies determine the general conditions for the issuance of individual loans, the procedure for issuing and circulating debt obligations, the time of issue of the next loan and the conditions for its functioning, organize the primary placement and secondary market of government securities, organize and (carry out the payment of income and repayment of debt obligations, organize and carry out the issuance of state (budget) loans and state guarantees, carry out control actions and other measures for the operational management of public debt. Similar issues are resolved within the framework of their competence by the legislative and executive bodies of the constituent entities of the Russian Federation. At the same time, they proceed from the norms laid down in federal legislation.

Public debt servicing. The servicing of state internal debt is carried out by the Central Bank of the Russian Federation, and external debt by Vnesheconombank. These banks carry out their work on the basis of special agreements with the Russian Ministry of Finance. Servicing the public debt of a constituent entity of the Russian Federation is carried out in accordance with federal and regional legislation. Payment of income from loans and their repayment are usually made from budget funds (Table 17.2).

Table 17.2

Federal budget expenditures on repayment and servicing of the public debt of the Russian Federation

Indicators	Year
	1995	1997	1999	2000	2002	2004	2005	2006	2007	2008
Federal budget expenditures, billion rubles.	275,2	500,0	674,0	1029,2	2054,2	2698,4	3514,3	4284,8	5986,5	7570,5
Expenses for repayment and servicing of public debt, billion rubles.	27,9	118,5	162,6	257,8	229,6	204,7	208,3	172,8	143,1	153,3
As a percentage of federal budget expenditures	10,1	23,7	24,1	25,0	14,4	7,6	5,9	4,0	2,4	2,0
In % of GDP	1,8	4,7	3,6	3,5	2,1	1,2	1,0	0,6	0,4	0,4

Refinancing government debt. In the face of a significant increase in public debt and growing budgetary difficulties, the country may resort to refinancing public debt. Refinancing refers to paying off old government debt by issuing new loans.

Methods of managing public debt. Measures used in public debt management include conversion, consolidation, reversion of bonds, deferment of repayments and cancellation of loans. Conversion refers to a change in the yield of loans, both towards a decrease and towards an increase in the yield of government securities. Loan consolidation refers to a change in their terms, usually upward. It is possible to combine consolidation with conversion. A regressive bond exchange means that several previously issued bonds are equivalent to one new bond. This measure is effective when repayment of previously issued bonds and payment of interest on them must be carried out in new, full-fledged money. Deferment of loan repayment is used by the government in cases where issuing new loans does not bring economic benefits, since most of the proceeds from new loans are used to repay and pay interest on old loans.

When deferring loan repayments, not only the terms are postponed, but the payment of income also stops. This is different from loan consolidation, which continues to pay bondholders income. Cancellation of public debt is an extreme measure, as a result of which the state completely abandons its obligations on issued loans; this usually occurs as a result of new political forces coming to power.

The difficulties of many countries in repaying external debt have given rise to new methods of covering obligations to creditor countries. Among them are repayment of debt with commodity supplies, exchange of debt obligations for shares and bonds of companies of the debtor country, payment of debt in local currency with its subsequent conversion into investments or property, exchange for debt obligations of third countries, etc. These methods of managing public external debt are usually combined into the concept of external debt conversion. In this case, conversion refers to the implementation of all mechanisms that ensure the replacement of external debt with other types of obligations that are less burdensome for the economy and finances of the debtor country.

Russia is now actively using the method of repaying external debt.

In light of the payments made to the participants of the Paris and London Clubs, the development of programs for the conversion of Russia's external debt has become relevant. In particular, the exchange of debt obligations for shares of privatized enterprises, the purchase of debts by the government for ruble funds and their subsequent allocation for investment are considered promising.

Public debt management performance indicators. The scale of mobilization of resources to finance the budget deficit is evidenced by the annual receipts of net proceeds from the sale of government borrowings. A more complete picture of the effectiveness of public debt activity is given by the ratio of the amount of excess receipts over expenses under the public debt system to the amount of expenses, expressed as a percentage. Management efficiency (E) is calculated using the following formula:

E = (P-P)/P + 100%, (17.1)

where P is revenue from the public debt system; P - expenditures on the public debt system.

The external public debt is used to determine its servicing ratio. It represents the ratio of all payments on external debt to the country's foreign exchange earnings from the export of goods and services, expressed as a percentage. A safe level of servicing external public debt is considered to be a ratio of up to 25%.

State financial policy

Contents of the state's financial policy. The set of state measures to mobilize financial resources, their distribution and use on the basis of the country’s financial legislation constitutes the state financial policy. Financial policy is an organic part of the state’s economic policy, consisting of measures in the field of formation and use of monetary funds. In the Russian Federation, these measures are defined in the Constitution of the Russian Federation, the Budget and Tax Codes and other laws, decrees and messages of the President of the Russian Federation, and in decrees of the Government of the Russian Federation. The content of the financial policy includes:

a) development of a scientific concept for the development of finance;
b) determining the main directions of their use in strategic and tactical plans;
c) practical actions to implement the goals and objectives of financial policy.

The main objectives of financial policy in modern stage development of the state are:

1. taking into account the effect of objective economic laws;
2. the need for financial support for activities aimed at accelerating market reforms and maintaining macroeconomic stabilization;
3. determination of sources of mobilization of financial resources, their composition, structure, possible reserves for increase (in this case, the amount of financial resources is outlined, their optimal and balanced ratio between state income and business entities; the share of participation of individuals in the formation of state revenue is determined);
4. ensuring the rational distribution and use of financial resources (the main proportions of the distribution of funds between sectors and spheres of the national economy, the development of priority sectors and areas, the degree of social protection of the population are determined);
5. concentration of financial resources in the most important areas of economic and social development;
6. balance of financial and monetary policy;
7. liberalization of foreign economic activity;
8. development of a financial mechanism for implementing the state’s financial policy.

Depending on the nature of the tasks, financial policy is divided into financial strategy and financial tactics. The financial strategy is focused on a long period of development and provides for the solution of large-scale problems within the framework of certain economic strategies of the state. Financial tactics are aimed at solving the problems of a specific stage of development of the state and are associated with changing the forms and methods of organizing financial relations based on its current needs. Financial strategy and tactics are closely related. As a financial strategy, one should consider the financial recovery of the economy and dynamic GDP growth, increasing competitive products. Such a recovery can be achieved through reducing the budget deficit, reducing inflation, strengthening the ruble exchange rate, and changing tax rates.

The theory and practice of management have developed a number of requirements for financial policy. These include:

• a scientific approach to the development of financial policy, presupposing its compliance with the laws of social development based on the achievements of financial science;
• taking into account the specifics of specific historical conditions, each stage of development of society, the peculiarities of the internal situation and the international situation, the real economic and financial capabilities of the state;
• studying the experience of previous economic and financial construction, new trends and progressive phenomena, world experience in the field of finance;
• adherence to an integrated approach in the development and implementation of financial policy by focusing on the implementation of the key task of a certain stage of development and ensuring a close relationship between the main parts of economic policy: financial and credit policy, pricing policy, wages;
• increasing the efficiency of the use of financial resources as a result of the effectiveness of financial policy (failure to take into account the factors of growth in the efficiency of use of financial resources when implementing financial policy leads to the dispersion of funds and a reduction in sources of financing the needs of the state);
• taking into account various factors in multivariate calculations, forecasting results, when developing the concept of financial policy;
• foreseeing the consequences of carrying out planned financial measures to avoid unpredictable changes in financial policy, creating favorable conditions for the activities of enterprises;
• the use of extensive and reliable information about the financial potential, the objective capabilities of the state, the state of affairs in the economy, the comprehensive use of mathematical modeling and electronic computer technology.

The implementation of financial policy and general management of the organization of finance in the Russian Federation is carried out by the Ministry of Finance of Russia. In accordance with paragraph 4 of the Decree of the Government of the Russian Federation dated April 7, 2004 No. 185 “Issues of the Ministry of Finance of the Russian Federation,” the main tasks of the Ministry of Finance of Russia are the development of a unified state financial (including budgetary, tax, insurance, foreign exchange, public debt), credit , monetary policy, as well as policies in the field of auditing, accounting and financial reporting, mining, production, processing of precious metals and precious stones, customs duties (in terms of calculation and payment procedure), including determination of the customs value of goods and vehicles. In the process of implementing these tasks, the Russian Ministry of Finance performs a number of functions.

In particular:

1. develops and submits to the Government of the Russian Federation draft federal constitutional laws, federal laws and acts of the President of the Russian Federation and the Government of the Russian Federation on the organization and functioning of the budget system of the Russian Federation, determining the foundations of the budget process; the federal budget for the next financial year, the procedure for executing the federal budget in the next financial year, reporting on its execution; delimitation of budgetary powers between the Russian Federation, constituent entities of the Russian Federation and local governments; financial relations between the federal budget and the budgets of the constituent entities of the Russian Federation and local budgets;
2. develops and approves the procedure for drawing up and executing the federal budget, budgets of state extra-budgetary funds; the procedure for maintaining the budget list of the federal budget; the procedure for compiling reports on the execution of the federal budget, budgets of state extra-budgetary funds and the consolidated budget of the Russian Federation;
3. carries out the drafting of the federal budget for the next financial year, organizing the execution of the federal budget; submission to the Government of the Russian Federation of reports on the execution of the federal budget and the consolidated budget of the Russian Federation, etc.

Financial mechanism and its role in the implementation of financial policy. The implementation of state activities in the field of finance occurs with the help of a financial mechanism, which is a set of types, forms and methods of organizing financial relations.

Structure of the financial mechanism quite complicated. It includes various elements corresponding to various financial relationships: taxes, rules and regulations, limits, government revenues and expenses, planning, forecasting, control, etc. Depending on the various areas and parts of the financial system, the following are distinguished: a) the mechanism for the functioning of public finances; b) financial mechanism of organizations (enterprises); c) insurance mechanism, etc. In turn, each of these areas includes separate structural units. For example, the mechanism of public finance is divided into the budgetary and the mechanism for the functioning of extra-budgetary funds. In accordance with the territorial division, we can distinguish the financial mechanism of the Federation, constituent entities of the Russian Federation, and local authorities. When considering the financial mechanism from the point of view of its impact on social reproduction, its functional links are highlighted: resource mobilization, financing, incentives, etc. Each sphere and individual link of the financial mechanism is an integral part of a single whole. On the one hand, they are interconnected, and on the other, spheres and shenyas function relatively independently. This circumstance necessitates constant coordination of the components of the financial mechanism. The internal linkage of the constituent (structural and functional) links of the financial mechanism is an important condition its effectiveness.

Spheres and links of the financial mechanism differ in the degree of complexity and ramification of individual elements. For example, the budget mechanism is characterized by a system of many types of taxes, the presence of various areas for using funds and methods of financing. At enterprises and organizations, the relationship between individual forms of monetary savings is determined, profits are distributed, and funds are formed and used. Insurance organizations have a widely developed system of reserve funds.

The combination of elements of the financial mechanism - forms, types, methods of organizing financial relations - forms the design of the financial mechanism, which is set in motion by establishing the quantitative parameters of each of its elements, i.e. determination of withdrawal rates and norms, volume of funds, level of expenses, etc. Quantitative parameters and various methods for determining them are the most mobile part of the financial mechanism. They are more often subject to adjustments and are sensitive to changes in production conditions and challenges facing society.

By forming a financial mechanism, the state strives to ensure its fullest compliance with the requirements of financial policy.

Types of financial policies. Financial policy is closely related to the characteristics of the current stage of economic and social development, the interests of ruling parties and social groups and theoretical concepts that influence the economic and political course of the state.

Analysis of financial policies used by various states allows us to distinguish three main types: classical, regulatory and planning-directive policies. Until the end of the 1920s. The main type of financial policy in most countries was the classical version. This financial policy was based on the works of the classics of political economy A. Smith and D. Ricardo and their followers. Its main directions are non-interference of the state in the economy, preservation of free competition, and the use of the market mechanism as the main regulator of economic processes. The consequence of this was the limitation of government spending and taxes, providing conditions for the formation and execution of an equilibrium (balanced) budget. The financial mechanism also corresponded to these financial policy goals:

• state budget expenditures were reduced, with the exception of military expenditures and expenses for servicing the public debt;
• the taxation system was based on indirect and property taxes;
• financial management was concentrated in one body - the Ministry of Finance (Treasury).

However, back in the 19th century. The rapid development of productive forces raised the question of changing approaches to financial policy for the state. This issue became especially acute in the late 1920s, when the whole range of economic and social problems of most states worsened.

During this period, Western countries made a transition to regulatory financial policies. It was based on the economic theory of the English economist J.M. Keynes and his followers, who proceeded from the need for government intervention and regulation of the cyclical development of the economy. Financial policy, along with its traditional objectives, began to pursue the goal of using the financial mechanism to regulate the economy and social relations to ensure full employment of the population. There have been changes in the financial mechanism:

• government spending becomes the main instrument for regulating the economy, through which additional demand is generated;
• The tax system is changing radically, the main one of which is the income tax, which ensures the withdrawal of income from economic entities;
• government credit is actively used, a system of long-term and medium-term government loans is being developed;
• The financial management system is changing, and several independent specialized bodies are emerging.

In general, Keynesian regulatory financial policy has shown its comparative effectiveness in Western countries. It provided in the 1930-1960s. stable economic growth, high levels of employment and an effective system of financing social needs in most of these countries. In the 1970s Financial policy was based on a neoconservative strategy associated with the neoclassical direction of economic theory. This type of financial policy did not abandon regulation as a goal, but limited government intervention in the economic and social sphere. Economic regulation is becoming multi-purpose. Except economic growth and employment, the state regulates money circulation, exchange rate, social factors of the economy, structural restructuring of the economy.

The financial mechanism in these conditions is characterized by the following features:

• the volume of redistribution of national income through the financial system is reduced;
• the budget deficit is reduced;
• the growth of savings is stimulated as a source of productive investment.

Planned and directive financial policy carried out in countries using an administrative-command system of economic management.

The goal of financial policy in these conditions is to ensure maximum concentration of financial resources from the state (primarily from the central authorities and management) for their subsequent redistribution in accordance with the main directions of the state plan. The financial mechanism was also built in accordance with the goals of the financial policy of the USSR:

• the state completely regulated the finances of state-owned enterprises through a two-channel system of withdrawal of net income (first, net income was withdrawn to the budget through taxes, and then enterprises contributed the free balance of profits to the budget);
• the population's funds were withdrawn through income taxes, as well as through the placement of forced government loans;
• Budget expenditures were carried out based on the priorities established by the state plan without linking them with the possible effect. In this regard, significant resources were used unproductively to finance the defense industries, long-term construction, military expenditures, etc.;
• financial management was carried out from a single center - the Ministry of Finance.

Planned-directive financial policy was carried out in almost all former socialist countries. It showed its fairly high efficiency during the Second World War, the restoration of the national economy, etc. At the same time, the use of such a financial system in conditions of normal functioning of the economy led to negative consequences: a decrease in production efficiency, a slowdown in the development of the social sphere, and a sharp deterioration in the financial situation of the state.

The main directions of modern financial policy of the Russian Federation. Financial policy in the Russian Federation includes the following main directions:

1. tax policy;
2. budget policy;
3. insurance policy;
4. investment policy;
5. income policy (salaries, pensions, scholarships, etc.).

Tax policy is an important component of Russia's financial policy. Tax policy should be aimed at creating tax conditions acceptable both for the state and for market participants, ensuring an improvement in the financial situation of the real sector of the economy. Main tasks tax policy Russia are:

1. comprehensive reform of tax legislation in order to optimize the tax base and reduce the level of non-payments;
2. review of existing tax and customs benefits;
3. increasing the level of tax collection;
4. tightening tax administration;
5. restructuring of penalties and fines on payments to the budget and state extra-budgetary funds.

Current tasks budget policy Russia are:

1. improvement of the budget system and budget process;
2. ensuring budget balance with full fulfillment of all expenditure obligations;
3. reducing the dependence of the federal budget on foreign economic conditions;
4. improvement of budget legislation;
5. development of medium-term (2-3-year) budget plans;
6. maintaining and increasing financial reserves;
7. centralization of all income and funds of the federal budget in the accounts of the Federal Treasury;
8. conducting an audit of federal target programs in order to optimize them;
9. restructuring of public debt;
10. inventory of external and internal borrowings, the results of their use.

State financial policy includes insurance policy, which is carried out in the following main directions:

1. development of bills to improve insurance activities, including on state insurance supervision, on the procedure for carrying out insurance activities and organizing the insurance business in the Russian Federation;
2. streamlining relationships and determining the legal conditions for the activities of insurance organizations of various forms of ownership;
3. active development various types insurance, including insurance of risks, including especially large ones (space, nuclear, etc.), liability insurance;
4. wide participation of insurance in solving social problems, including the protection of citizens from the consequences of road accidents, product quality insurance, accident insurance for workers in certain professions, unemployment insurance, etc.;
5. creation of associations (unions, associations) of insurers to resolve issues of development of the insurance business, protect the interests of insurers, develop a joint program of strategy and tactics for the development of insurance.

Of particular importance in modern conditions is investment policy, which includes:

1. building up the country’s financial potential in order to increase investment activity by stimulating domestic demand for domestic products, producing import-substituting products, and improving the financial sector;
2. increasing the role of the development budget, which is an integral part of the federal budget, formed as part of its capital investments and used as a source of financial support for the state investment policy;
3. creating conditions for the organizational accumulation and investment of savings of the population;
4. development mortgage lending;
5. attracting foreign direct investment.

In area income policy provides:

1. payment in full of current wages to public sector employees, monetary allowance military personnel, other government social transfers, as well as fulfillment of the debt repayment schedule for these population groups from the federal budget;
2. linking the transfer of transfers to constituent entities of the Russian Federation with the fulfillment of their obligations to finance current payments to public sector employees from their own income;
3. development of mechanisms for compensating the income of the least well-off segments of the population, including differentiated indexation of pensions and phased indexation of rates and salaries of public sector workers;
4. curbing the growth of unemployment and creating conditions for expanding employment;
5. implementation of pension reform, ensuring the formation of a multi-level pension system with sustainable financing; introduction of elements of funded pension financing;
6. streamlining the system of social benefits and payments with the transfer of the bulk of state assistance to low-income segments of the population.

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Introduction

The leading, determining role in the formation and development of the economic structure of any modern society is played by state regulation, carried out within the framework of the economic policy elected by the authorities. One of the most important mechanisms that allows the state to carry out economic and social regulation is the financial mechanism - the financial system of society, the main link of which is the state budget. It is through the financial system that the state forms centralized funds and influences the formation of decentralized funds of funds, ensuring the ability to perform the functions assigned to state bodies.

The creation of a new type of economy and the implementation of structural reforms that ensure an improvement in the quality of life in the conditions created in recent years by the foundations of a market economy require an assessment of the resource potential in achieving the set goals. The most important indicator reflecting both financial support and the role of the state in the economy, and the interaction between the state and business, is the tax burden and the effectiveness of government spending. Along with other powers and economic policy instruments, budget policy is the main tool for achieving the intended result.

Currently, “State budget and budget deficit » is a significant problem for almost all countries of the world - developed, developing, with economies in transition, of different social systems. That is why the most important task of the economic policy of states is to find an optimal solution to the problems of budget deficit and public debt.

The relevance of the topic of the course work lies in the fact that modern trends in the development of the financial system are directly related to the transition period when the financial system was reformed to adapt to new conditions.

Scientists such as: Vasilyeva studied the above-mentioned economic phenomena. A.N., Voitov. W.G., Fischer S., Dornbusch R., et al.

The purpose of the course work is to analyze the state budget as the most important element of the financial system of society, the main features of the budget system. Disclosure of the concept of budget deficit and public debt, their analysis and possible ways to manage these indicators; identifying the most significant problems in the functioning of the budget mechanism and considering possible ways to solve them using the example of the state budget (budget system and budget process) of the Russian Federation.

Coursework objectives:

1) Consider the features of the formation of the state budget in the economy;

2) Form a concept, determine the types of budget deficit in the modern economy;

3) Reveal the mechanism and analyze ways of financing the budget deficit in the Russian economy.

4) Compare the state budget of the Republic of Bashkortostan.

The object of the course work is the socio-economic significance of the budget and the problem of the budget deficit.

The subject of the course work is the budget deficit and public debt. The state budget as part of the financial system requires constant study and analysis.

Chapter1. State budget and its role in the economy

1.1 The essence of the state budget and its functions

The budget is the central link of the state's financial system. With its help, goals and objectives determined by economic policy. At the same time, the importance of government regulation cannot be overestimated. There are main categories included in the budget of any state - these are taxes, loans, expenses, which always remain unchanged.

The state budget is a list of the state’s monetary income and expenditures, which represents the state’s main financial plan for the current year and has the force of law.

The budget is approved by legislative bodies - parliaments, and in Russia - by the Federal Assembly. In terms of material content, the state budget is a centralized fund of state funds; in socio-economic essence, it is the main means of redistributing national income and other macroeconomic results of social production to achieve the social objectives of society.

The state budget covers the totality budgetary relations on the formation and use of the country's budget fund. Vasilyeva A.N. Financial policy of Russia [Text] / A.N. Vasilyeva - M.: Sotsekniz, 2005. - P.85-96.

Budgetary relations characterize, in turn, the financial relations that arise between the state, enterprises, institutions and the population and are associated with the formation and use of a centralized fund of funds intended for joint consumption. Budgetary relations are characterized by versatility due to the fact that they mediate different directions of the distribution process (financial connections between sectors of the economy, spheres of public activity, sectors of the national economy, territories of the country) and cover all levels of management (federal, republican, local). Budgetary relations depend on farming methods, the socio-cultural development of the country, and the financial policy of the state. The need for such relations is due to the fact that a certain share of national income (deductions in the form of taxes and payments from income) is concentrated in the hands of the state, which must be distributed for the needs of reproduction of the entire society, to solve public problems, such as management, defense, social -cultural development. In the process of functioning, budgetary relations are embodied in the country's budget fund, the value of which depends on the needs of society for the development of certain sectors of the national economy and structural changes in the economy.

In its economic essence, the state budget reflects the monetary relations that the state has with legal entities and the population. Voitov A.G. Economics [Text] / A.G. Voitov - M.: Marketing, 2002. - P.45-55. They consist in the redistribution of national income in connection with education and the use of funds: to finance the economy, implement social policy, develop science, culture, education, ensure the defense of the country and manage society.

The peculiarity of this link in the financial system is that the budget is associated with the separation of part of the national income in the form of taxes and payments in the hands of the state and its use for public purposes. The state budget, in contrast to the financial system as a whole, redistributes only the part of national income available to it (and not all national wealth) between industries, territories, spheres of public activity in proportions determined primarily by the needs of reproduction in general and financial policy states.

The state budget should be considered as a means of implementing the financial functions of the state. Thanks to budgetary relations, funds are concentrated in the hands of the state and used to carry out its functions by the state.

The state budget performs the following functions:

1) distribution;

2) social;

3) control.

The distribution function of the budget is manifested through the formation and use of centralized funds of funds at the levels of state and territorial government and management. In developed countries, up to 50% of GDP is redistributed through budgets at various levels. With the help of the budget, the state regulates the economic life of the country, economic relations, directing budget funds to support or develop industries and regions. By regulating economic relations in this way, the state is able to purposefully increase or restrain the rate of production growth, accelerate or weaken the growth of capital and private savings, and change the structure of demand and consumption. This demonstrates the stimulating function of the budget.

The social function of the budget is to accumulate funds in the budget and use them to implement social programs aimed at developing health care, culture, education, and supporting the poor.

The control function of the budget allows you to find out how timely and completely financial resources are available to the state, how the proportions develop in the distribution of funds, and how they are used. The budget reflects the economic processes occurring in the structural links of the economy, thanks to which it becomes clear where funds come from and in what amounts

The manifestation of the functions of the state budget is reflected in the budget mechanism created by the state, which is the real embodiment of budget policy, and reflects the specific focus of budget relations on solving economic and social problems.

1.2 Fiscal policy

Budget policy is a set of decisions made by legislative (representative) and executive authorities related to determining the main directions for the development of budgetary relations and developing specific ways of using them in the interests of citizens, society and the state.

Budget policy is part of the financial policy of the state and, as such, acts as a means of implementing the economic and social policy of the state Sorokina T.V. State budget [Text] / T.V. Sorokina. - M.: Lawyer, 2003. - P.89-95. .

The development of budget policy begins with defining the conceptual basis for the development of the budget, establishing its role in social reproduction at the appropriate time stage. Then the goals and objectives of budget policy are formed, determined on the basis of the main directions of using budgetary relations in the interests of citizens, society and the state. At the final stage of budget policy, specific ways to solve the set goals and objectives should be developed, allowing for the implementation of the main directions of using budgetary relations at a given period of time.

The functional aspect of budget policy includes:

1) policy in the field of budget revenues (fiscal);

2) policy in the field of budget expenditures;

3) policy in the field of budget expenditures; budget balancing policies;

4) policy for effective management of state and municipal debt;

5) policy in the field of interbudgetary relations.

The time aspect of budget policy consists of a budget strategy designed for the future and budget tactics focused on carrying out activities in a specific financial period.

Budget policy is carried out both at the state and subfederal (regional) and municipal levels. Without an independent, thoughtful and effective budget policy, the financial and budgetary independence of neither state, nor territorial, nor municipal entities cannot be ensured.

The basis of budget policy is the strategic directions of economic and social policy of the state. They determine the size and proportions of financial resources centralized by the state, the prospects for using budget funds in the interests of solving the main social and economic problems of the state. In market conditions, budget policy is the main lever for determining the main directions of the state’s economic influence on social production.

The main requirement for ensuring the effectiveness of budget policy is a scientific approach to its development, taking into account the real state of the country's economy, finances and budgetary system.

The effectiveness of budget policy also largely depends on compliance with two conditions:

1) political stability in the country;

2) a high level of professionalism of public sector workers.

Legislative (representative) and executive authorities participate in the development of budget policy. The specifics of the constitutional system of modern Russia have determined that priority in the development of budget policy belongs to the President of the Russian Federation.

The tools for implementing budget policy are budget law and the budget mechanism.

1.3 Budget structure in the Republic of Bashkortostan

The budget structure is a set of such elements as the organization and principles of constructing the budget system, the budget process, the relationship between numerous types of budgets, and the set of budget rights.

In general, in different countries of the world, the budget structure differs in features depending on the government structure, territorial and administrative division, level of economic development and other specific features of a particular state Kozyrev V.M. Basics modern economy[Text] / V.M. Kozyrev. - M.: Progress, 1999. - P.56-75. .

The budget system, which is a set of budgets of individual administrative-territorial entities of each state based on economic relations and legal norms, occupies the main place in the budget structure. The budgetary systems of different countries differ in their structure and the number of individual types of budgets, because they largely depend on their government structure and its territorial division.

Currently, the budget system of the Republic of Bashkortostan includes the republican budget, the budget of the city of Ufa and local budgets. Our budget system is based on the principles of unity, independence of all budgets, their completeness, reality and transparency.

The principle of unity means the concentration in the state budget of all expenses incurred and income received; the state should have only one budget. This ensures that legislative bodies can exercise more effective control over finances. The requirement of unity is complemented by the principle of completeness, which implies accounting for each item of all costs and revenues.

The principle of truthfulness and reality is aimed against falsification of budget schedules and compliance with approved expenditure items.

The principle of transparency obliges the government to publish the budget, its main expenses and sources of income.

Thus, all the principles of building a budget system are interconnected and complement each other; they are legally reflected in the Constitution of our republic and special laws: “On the budget system of the Republic of Belarus” and some other legislative acts. Raizberg B.A. Economics course [Text] / B.A. Reisberg. - M.: Infra-M, 2005. - P.63-77.

All of these elements of the budget structure function in their unity and interconnectedness and ensure the implementation of a unified budget policy of the state through the republican and local budgets.

The state budget, being the main financial plan of the state, the main means of accumulating financial resources, gives political power a real opportunity to exercise power, gives the state real economic and political power.

As noted above, with the acquisition of independence, the state budget of the Republic of Belarus of the Russian Federation received a new purpose, changes occurred in its structure, the content of income and expenses.

In general, the main features of the budget of the Republic of Belarus of the Russian Federation in the transition period are characterized as follows:

1) The budget remains the main instrument for centralizing a significant part of the produced national income and redistributing it for public needs.

2) The revenue side of the budget is formed mainly from taxes and fees from legal entities and individuals.

3) Expenses are growing faster than the sources of covering them, which is caused by the expansion of state functions and the emergence of new public costs.

4) The budget deficit reaches enormous proportions in absolute numbers and in relative terms to GNP and national income, which makes it difficult to manage this process and has a negative impact on the balancing and development of the economy.

Serious changes are taking place in the budget structure, and, above all, in the budget system of the Republic of Belarus of the Russian Federation; the independence of all types of budgets is increasing. But as before, the decisive place in the implementation of national economic and social programs belongs to the republican budget.

The process of consolidation in the budget of a number of state extra-budgetary and budgetary trust funds, the formation of transfer relations with legal entities and individuals required a lot of work to update budget legislation.

Since the most important areas of budget policy are the collection of budget revenues, the fulfillment of budget obligations, the management of the budget deficit and public debt, the effectiveness of the entire budget policy can be assessed by the performance of executive authorities in these areas. The state of public finances has a very strong impact on the real economy, so the dynamics of the main macroeconomic indicators can also act as one of the criteria for the success of the implemented budget policy option.

The following can be proposed as criteria for the effectiveness of budget policy:

1) the level of collection of budget revenues in general, taxes in particular;

2) the level of fulfillment of budget obligations;

3) the size of the budget deficit and the rate of growth of public debt;

4) the amount of financial resources diverted to serve the state budget;

5) the amount of foreign exchange reserves used to finance the budget deficit; - dynamics of gross domestic product;

6) unemployment rate, etc.

Thus, the analysis of budget policy, which is one of the main directions of economic policy, requires consideration of the activities of the state to determine the main tasks and quantitative parameters of the formation of budget revenues and expenditures, which is the subject of the next chapter.

In the second chapter we will consider the problem of the budget deficit.

state budget deficit debt

Chapter 2. Budget deficit problem

2.1 The concept of budget deficit, its types

A decisive role in the formation and economic development of any modern society is played by state regulation, carried out within the framework of economic policy elected by the authorities. One of the most important mechanisms that allows the state to carry out economic and social regulation is its financial system, the main link of which is the state budget. It is through the financial system that the state creates centralized funds and influences the formation of decentralized funds of funds, ensuring the ability to perform the functions assigned to state bodies. However this system often faces problems expressed in the form of budget deficits. Therefore, one of the most important issues of public finance is the problem of the budget deficit.

The budget deficit refers to the so-called negative economic categories such as inflation, crisis, unemployment, which are, however, integral elements of the economic system. Commercial banks and their operations [Text] / O.M. Markova, L.S. Sakharova, V.N. Sidorov. - M.: UNITY, 2005. - P.36-39. .

The budget deficit is due to various reasons. In some cases, the state may deliberately increase the budget deficit. In particular, in order to stimulate economic activity and aggregate demand during a period of recession, the government may take special decisions aimed at increasing the level of employment (for example, financing programs to create new jobs) or significantly reducing taxes. As a result, budget expenditures increase or budget revenues decrease, and a deficit arises. But this deficit is deliberately created by the state. This deficit is called a structural deficit.

Unlike the structural deficit, the cyclical deficit depends to a lesser extent on the conscious fiscal policy of the state. It is due to the general decline in production, which occurs at the crisis stage and is the result of the cyclical development of the economy. In the context of a decline in production, taxes and state revenues are reduced, which means a deficit arises Simkina L.G. Economic theory [Text] / L.G. Simkina. - SPb.: PETER, 2005. - P.45-48. .

There are also active and passive deficits. An active deficit arises as a result of expenses exceeding income, and a passive deficit arises as a result of a decrease in tax rates and other revenues, which is a consequence of a slowdown in economic growth, underpayments, etc.

There are short-term and long-term budget imbalances. Imbalance is short-term in nature if the excess of expenses over income is limited to one financial year and is a reflection of changes in the macroeconomic situation compared to the one in which the budget was drawn up. This is mainly due to the lack of necessary experience in macroeconomic forecasting and insufficient consideration of possible changes in a number of circumstances. For example, a reduction in budget revenues may occur as a result of falling export prices, a reduction in production volumes below the stipulated level, shifts in the structure of demand for manufactured products and a decrease in their competitiveness. An increase in the government budget deficit could also be caused by an unexpectedly sharp increase in government spending due to an increase in inflation above the target value, the expansion of transfer payments in combination with the introduction of tax breaks, which is a very popular measure before the next elections.

Long-term fiscal imbalance is associated with a widening gap between government expenditures and revenues over a number of years and is due to reasons that are more persistent in nature. Thus, in most developed countries over the past 15 years there has been a steady trend towards an increase in the national budget deficit due to the following factors:

1) increase in number social payments, which means the social burden on the budget;

2) an unfavorable demographic situation associated with the aging population, as a result of which the costs of paying pensions, allocations for health care, etc. increase;

3) liberalization of tax legislation and, as a consequence, a reduction in tax rates (without corresponding adjustments to government spending);

4) an increase in the volume of external debt.

In general, the state of the state budget is determined by the long-term trend in the dynamics of tax revenues and government spending; the stage of the economic cycle in which the economy is located during the period under review; current state policy in the field of budget expenditures and revenues Lobacheva E.N. Economics [Text] / E.N. Lobacheva. - M.: Exam, 2003. - P.44-56. . Very often, especially in our country and in other countries, there is an artificial either overestimation or underestimation of the true size of the budget deficit. Thus, artificially lowering the budget deficit can be carried out using the following tools:

1) tax amnesty, which allows taxpayers who have previously evaded paying taxes to deposit at one time the entire amount equal to a certain part of the total tax collection;

2) measures to collect overdue tax payments;

3) introduction of temporary or added taxes;

4) deferrals of wage payments to public sector employees;

5) delayed mandatory indexing wages in accordance with the dynamics of the inflation rate;

6) sale of state assets;

7) the presence of a hidden deficit caused by quasi-budgetary expenditures.

The latter include centralized loans provided on preferential terms by the central bank. In addition, the Central Bank can finance individual operations related to public debt, cover losses from measures to stabilize the exchange rate, refinance agriculture, etc. As a result, the Central Bank's losses increase and inflation increases, but the deficit does not grow.

2.2 Financing the budget deficit

To reduce the budget deficit, it is necessary to stimulate in every possible way the flow of income from all industries and all areas of economic activity and at the same time reduce government spending. In this case, various sources of raising funds can be used.

Classically there are three of them - money emission, central bank loans and government borrowing, both internal and external.

In transition economies, government deficit monetization is usually used in cases where there is significant external debt and this precludes concessional financing from foreign sources, and domestic debt financing options are also practically exhausted, which is often the main reason for high domestic debt. interest rates. The first source is the most inflationary and therefore becomes unacceptable for covering the budget deficit.

Lending from the central bank (for example, receiving grants from abroad or concessional loans for low rates with long maturities) are the most attractive, since in this case the deficit not only does not have a negative impact on the economy, but can also be very useful if such financing is associated with the productive use of resources. Often, however, the possibilities of preferential financing in transition economies are either limited due to significant external debt, or are used by governments primarily for unproductive purposes - for consumer subsidies, pension payments, expansion of the state apparatus, etc. Such additional budget expenditures cannot be quickly reduced if external subsidies are stopped due to the lack of guaranteed internal sources of coverage, which increases the overall tension in the budgetary and tax sphere. Due to this, in many developed countries, including Russia, direct lending is either prohibited or seriously limited McConnell K.R., Economics [Text] / K.R. McConnell, S. L. Brew. - M.: Republic, 2005. - P.111-116. .

Domestic debt financing of the budget deficit is often considered as an anti-inflationary alternative to monetization. However, this method of financing does not eliminate the threat of rising inflation, but only postpones this growth.

If government loan bonds are placed among the population and commercial banks, then inflationary tension will be weaker than when they are placed in Central Bank. However, the latter can buy up these bonds on the secondary securities market and thereby expand its quasi-fiscal operations, contributing to the growth of inflationary pressure.

In the case of mandatory (forced) placement of government bonds in extra-budgetary funds (pension, insurance, etc.) at low (and even negative) interest rates, domestic debt financing of the budget deficit turns, in essence, into a mechanism for additional taxation. Moreover, with high interest rates and significant government budget deficits, a sharp increase in the share of government domestic debt in GDP inevitably occurs over time, especially at low rates of economic growth. Fisher S. Microeconomics [Text] / S. Fisher. - M.: Somintek, 2000. - P.83-96.

An increase in the burden of domestic debt also increases the share of government spending on its servicing, which leads to self-increasing of both the budget deficit and government debt. This seriously limits the possibility of reducing fiscal tensions and stabilizing inflation. In general, in transition economies, domestic debt financing of budget deficits is associated with relatively moderate costs only in cases where:

1) it is difficult to control the provision of loans to the private sector;

2) domestic supply is relatively elastic;

3) external debt financing is relatively expensive or limited due to the significant external debt burden, while existing domestic debt is insignificant;

4) inflation accompanying the transition period has reached high rates or seems absolutely inevitable.

Alternative opportunities for external concessional financing of the budget deficit (for example, receiving gratuitous subsidies from abroad or preferential loans at low rates with long repayment terms) are the most attractive, since in this case the deficit not only does not have a negative impact on the economy, but can also be very useful if such financing is associated with the productive use of resources. Often, however, the possibilities of preferential financing in transition economies are either limited due to significant external debt, or are used by governments primarily for unproductive purposes - for consumer subsidies, pension payments, expansion of the state apparatus, etc. Such additional budget expenditures cannot be quickly reduced if their external subsidies are stopped due to the lack of guaranteed domestic sources of coverage, which increases the overall tension in the budgetary and tax sphere.

External financing of the budget deficit turns out to be more inflationary than its monetization, since the supply of goods on the domestic market increases to the extent that external loans contribute to the expansion of Dornbusch imports. R. International credit and financial relations [Text] / R. Dornbusch. - M.: UNITY, 2005. - P.57. .

At the same time, the more open the transition economy is and the more rigid its exchange rate, the less external debt financing will be inflationary, but the stronger will be its impact on the balance of payments. Raising funds from foreign sources to finance budget deficits may be a relatively attractive option for transition economies in cases where:

1) it is possible to organize concession financing;

2) there is a shortage of capital in the domestic market with a high internal rate of return;

3) the trade balance is relatively healthy with favorable prospects for market expansion;

4) the initial amounts of external debt are insignificant;

5) the primary task of macroeconomic policy is to reduce likely inflation.

2.3 Public debt

The use of funds received from the population, enterprises, and credit organizations as loans leads to the need to pay a certain amount of money to the lender in the future, which leads to a spiral, increasing the already large deficit when repaying the loan and paying interest. By resorting to such loans, the state accumulates its debt, called public debt. Public debt is a burden that complicates the normal functioning of the economy. An increase in government debt reduces the stock of capital in the economy, since the owner of savings, instead of investing them in the economy by buying shares of industrial companies or lending to expand capital, purchases bonds, financing the state.

If savings do not increase, then the presence of public debt reduces the share of equity capital relative to its potential value. Due to the fact that the economy assumes equality of investment and savings, a decrease in savings leads to a decrease in investment, and, consequently, to a decrease in the level of GDP and, accordingly, the standard of living of the population in the future. The state's interest payments on this debt increase, the state increases taxes, which again leads to a decrease in GDP or to an increase in further debt.

Under these conditions, the state cannot cope with its obligations and resorts to debt restructuring, which means the repayment of debt obligations with the simultaneous borrowing (assuming other debt obligations) in the amount of repaid debt obligations with the establishment of other conditions for servicing debt obligations and the timing of their repayment . Such restructuring can be carried out with a partial write-off (reduction) of the principal amount.

The consequences of turning a budget deficit into public debt: turning to banking institutions for a loan increases the demand for money and, accordingly, increases the cost of credit, which results in higher prices and suppressed investment. When resorting to external debt after the loan expires, national income leaks abroad, since the loan must be repaid and interest paid on it.

The constant use of loans to cover the state budget deficit is fraught with an increase in the cost of servicing the public debt and a reduction in household savings. All this creates serious obstacles to private investment. Nikolaeva I.P. Economic theory in questions and answers [Text] / I.P. Nikolaeva. - M.: Prospekt, 2002. - P.35-42.

The life of a country burdened with external and internal debts requires a competent strategy and skillful use of credit funds in choosing the best option for economic development. Public debt management includes the following measures:

A) efficient use borrowing funds;

b) searching for funds to pay off debt;

c) neutralizing the negative consequences of public debt.

Many countries have special services for managing public debt. Their task is to prevent debt from exceeding GDP by more than 2.5 times, which helps avoid a debt trap in which all the country’s efforts will be directed only at paying off the debt.

Effective use of borrowing funds involves directing them to projects with a return that exceeds not only the amount of debt, but also interest payments on it. The interest rate becomes the minimum criterion for the efficiency of using borrowed funds.

Solving the problem includes several tactical directions: waiving the debt or part of it; using new borrowing to pay off existing debts; debt rollover; its conversion; sale of bad debts.

Refusal of debts is considered an unwise measure, since it undermines the reputation of the state. In the future, it will no longer be able to count on receiving loans. The use of new borrowing to pay off old debts cannot be resorted to indefinitely, since increasing the debt reduces the creditor's hopes of getting his money back.

Debt rollover involves extending the payment period. In this case, the amount of interest will increase, because interest is paid on the amount of the loan and the unpaid interest. It is more profitable for the state to restructure the debt, in which it is transferred to the rank of long-term, which does not lead to an increase in interest payments .

Debt conversion is associated with turning it into long-term foreign investment, when in exchange for debt, creditor countries are offered to buy real estate, participate in equity capital, etc.

Sale of bad debts possible if a country has given a loan to another state in the past. Such debts are sold at a significant discount.

Overcoming the budget deficit, first of all, should be based on the development of production, ensuring the financial stability of all sectors of the economy and enterprises of all forms of ownership, and the activation of entrepreneurship. Kamaeva V.D. Economic theory [Text] / V.D. Kamaeva - M.: Humanit, 2004. - P.73-79. .

As for reducing budget expenditures, it can be achieved by changing the direction of investment of budget funds, using only targeted financial benefits and sanctions that allow taking into account the conditions of various producers. Important ways to reduce expenses are to reduce excessive military and other expenses, to finance only the most important social programs, and to prevent the implementation of activities at the expense of the budget that do not have a real financial basis. It is not excluded that foreign capital can be attracted to the country in order to modernize production, reduce costs and reduce budget expenditures on this basis. Reducing state budget expenditures is not always feasible, as it can exacerbate the economic downturn and provoke social tension.

Thus, we have examined the problems of the budget deficit. The budget deficit refers to negative economic categories such as inflation, crisis, unemployment, which are, however, integral elements of the economic system. In transition economies, monetization of government deficits is usually used in cases where there is significant external debt

In the third chapter we will consider the analysis of the state budget of the Russian Federation for 2012-2014.

Chapter 3. Analysis of the state budget of the Russian Federation for 2012-2014 yy

3.1 Analysis of state budget revenues

In accordance with the approved Federal Law of the Russian Federation “On the Federal Budget for 2012 and for the planning period of 2013 and 2014”, the total amount of income in 2012 compared to the income approved by the Federal Law of the Russian Federation for 2011 will increase by 5.9% and amount to 11 779,855,206 thousand rubles. It is planned that federal budget revenues in 2013 will increase by 7.8% in relation to 2012 revenues, and 2014 revenues in relation to 2013 will increase by 10.9%. The income to gross domestic product (GDP) ratio is projected by the government to be fairly stable compared to previous years, hovering around 19-20%. From the analysis of the structure of federal budget revenues for 2011-2014, presented in Appendix 1, it follows that this growth is planned to be achieved through increased revenues from value added tax (VAT). Considering that the forecast for GDP growth is significantly lower than forecasts for the growth of VAT revenues, we can conclude that in 2013-2014 the Government of the Russian Federation plans to increase the value added tax rate.

The most significant types of income for the federal budget are:

Income from foreign economic activity in 2012 will amount to 4,474,343,737 thousand rubles (or 38% of all budget revenues). Statistics previous years shows that most of them are export customs duties on oil, oil products and gas. They account for more than 75% of all foreign economic receipts.

Taxes on goods, works and services provide the state with 2,218,397,542 thousand rubles (19% of budget revenues). The largest part in the structure of these taxes (about 90%) is value added tax (VAT).

The third main component Russian budget These are mineral extraction taxes (MET). This year they will amount to 2,113,120,361 thousand rubles (18% of budget revenues). The main share of the mineral extraction tax is the oil production tax (over 90%).

Thus, we can conclude that the state budget of the Russian Federation receives the bulk of its revenue from the sale of oil and petroleum products.

3.2 Analysis of state budget expenditures

As can be seen from Table 1 in Appendix 2, state budget expenditures will increase by 8.7% compared to 2011 and amount to 12,656,443,993.1 thousand rubles.

The main share of state budget expenditures will be expenditures on national defense, national security, national economy and social policy. They will amount to 943 billion rubles, 1365 billion rubles, 1744.4 billion rubles, and 3899 billion rubles. respectively. In addition to the identified areas of expenditure of the state budget of the Russian Federation, it is also possible to highlight expenditures on healthcare, education and other expenses. These expenses are the most significant for the country's budget.

It is planned to reduce budget expenditures on the national economy by approximately 8% to 1,653 billion rubles by 2014. At the same time, there is a significant reduction in state budget expenditures on education, culture, healthcare, physical education and sports, and especially on housing and communal services. According to experts from FBK LLC (Financial and Accounting Consultants), over three years, defense spending will increase from 13.9% to 18.8%, and for national security and law enforcement - from 11.3% to 14. 2%. At the same time, the costs associated with investments in human capital, having reached a peak in the run-up to the elections, will then begin to decline. “The share of expenditures on education, having reached 5.1% in 2011, will sharply decrease in 2014 - to 3.4% of all federal budget expenditures. The same thing happens with healthcare costs: the maximum will be in 2011 - 4.6%, and by 2014 their share will fall to 3.2%." State spending on housing and communal services will be reduced from 2.1% to 0.5%.

3.3 Budget deficit analysis

The budget for 2012 was approved with a deficit equal to 876,588,787.1 thousand rubles. In 2013, the federal budget deficit is projected to amount to 1024.7 billion rubles, which is approximately 17% more than in 2012. And in 2014, the budget deficit will decrease by approximately 52% and amount to 491.1 billion rubles.

Taking into account the GDP forecast for 2012-2014, given in the Federal Law of November 30, 2011 No. 371-FZ “On the federal budget for 2012 and for the planning period of 2013 and 2014” the federal law Russian Federation [Electronic resource]: from November 30. 2011 No. 371-FZ: adopted by the State. Duma Feder. Collection Ross. Federation, it can be calculated that the federal budget deficit will be 1.5% in 2012, 1.6% in 2013 and 0.7% of GDP in 2014.

Projected inflation rate in the Russian Federation in 2012. should be no more than 6.0% in 2013. - no more than 5.5%, and in 2014 - no more than 5.0%.

The above data allows us to conclude that the budget deficit of the Russian Federation is significantly lower than the inflation rate and is at an acceptable level in relation to GDP.

Federal Law No. 371-FZ dated November 30, 2011 “On the federal budget for 2012 and for the planning period of 2013 and 2014” established that, mainly, the federal budget deficit in 2012-2014 will be financed from internal sources of financing, and precisely due to the difference between the funds received from the placement and the funds allocated for the redemption of government securities denominated in Russian rubles.

Thus, in 2012, sources of external financing of the country's budget deficit have a negative value.

Zconclusion

The budget, which combines the main financial categories (taxes, government credit, government spending), is the leading link in the financial system of any state and plays both an important economic and political role in any modern society.

The budget deficit plays a key role in the mechanism of development of inflationary processes that destroy the country's economy, as well as its leading role in the system of indicators of the country's economic security. The policy in the field of financing the budget deficit should be based on the use of internal sources, which involves reducing lending to the republican budget deficit by the National Bank, increasing the efficiency of the government securities market and improving the mechanism for managing internal debt.

The main goal of improving the state's budget policy should be to strengthen its stimulating function for the transition of the country's economy to the post-industrial stage of development at the beginning of the third millennium. The budget deficit criterion, in essence, plays the role of a regulator with negative feedback, and therefore should play a leading role in the system of indicators of economic security of the Russian Federation. However, I would like to note that at the same time, the budget deficit itself may not be something extremely negative for the development of the economy and the dynamics of the living standards of the population. Even the most economically developed countries, as a rule, constantly have a budget deficit of 10 to 30%. It all depends on the reasons for its occurrence and the directions of expenditure of public funds. If the financial resources that make up the excess of expenses over income are directed to the development of the economy, used for the development of priority industries, i.e., they are used effectively, then in the future the growth of production and profits in them will more than compensate for the costs incurred and society as a whole from such a deficit only will win. If the government does not have a clear economic development program, and allows expenses to exceed revenues in order to patch up “financial holes” and subsidize unprofitable production, then the budget deficit will inevitably lead to an increase in negative aspects in economic development, the main one of which is the strengthening of inflationary processes.

It is known that public debt is rooted in the country's budget deficit. To cover the deficit, the state resorts to borrowing, both in the domestic and foreign markets. Thus, public debt, on the one hand, is a liability for the state and an asset of holders of government bonds (government borrowed securities).

The development and consistent implementation of measures aimed at increasing budget revenues and reducing its size, regulating the budget deficit, and purposefully managing its size in conjunction with other economic anti-crisis measures will stabilize financial position countries.

As a result of the analysis of income and expenses of the State Budget of the Russian Federation for 2012-2014, some conclusions can be drawn.

Firstly, the Russian economy continues to be a commodity-based economy, dependent mainly on the cost of oil on the world market. The structure of state budget revenues will not change in the coming years.

Secondly, the planned level of budget deficit is within 2%, which corresponds to international standards.

Thirdly, budget expenditures show a clear imbalance in support of the military-industrial complex and the law enforcement system and a decrease in investment in human capital. And without a healthy, educated and satisfied person, it is impossible to build a strong state.

Bibliography

1. Vasilyeva A.N. Financial policy of Russia [Text] / A.N. Vasilyeva - M.: Sotsekniz, 2005. - 228 p.

2. Voitov A.G. Economics [Text] / A.G. Voitov - M.: Marketing, 2002.- 150 p.

3. Sorokina T.V. State budget [Text] / T.V. Sorokina. - M.: Lawyer, 2003. - 189 p.

4. Kozyrev V.M. Fundamentals of modern economics [Text] / V.M. Kozyrev. - M.: Progress, 1999. - 156 p.

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6. Markova O.M., Sakharova L.S., Sidorov V.N. Commercial banks and their operations [Text] / O.M. Markova, L.S. Sakharova, V.N. Sidorov. - M.: UNITY, 2005. - 139 p.

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14. Website State Duma RF: www. duma. gov. ru

Application1

Table 1. Structure of federal budget revenues for 2011-2014.

				(thousand rubles)
Name	2011 (updated estimate)
Tax and non-tax revenues
Profit taxes, income
Taxes on goods sold in the Russian Federation
Taxes on goods imported into the Russian Federation
Taxes, fees and regular payments for the use of natural resources
Government duty
Debt and recalculations for canceled taxes
Income from foreign economic activities
Income from the use of state and municipal property
Payments for the use of natural resources
Income from the provision of paid services and compensation of state costs
Income from the sale of tangible and intangible assets
Administrative fees and charges
Fines, sanctions, damages
Other non-tax income
Free receipts
Free receipts from other budgets of the budget system of the Russian Federation
Free receipts from government organizations
Free receipts from non-governmental organizations
Other gratuitous receipts
Revenues of the budgets of the budgetary system of the Russian Federation from the return by the budgets of the budgetary system of the Russian Federation and organizations of the balances of subsidies, subventions and other interbudgetary transfers with a designated purpose of previous years
Total income

Appendix 2

Table 2. Structure of federal budget expenditures for 2011-2014.

Name

2011 Expected estimated

Change by 2011

In billions rub

In billion rubles

In billion rubles

Including:

National issues

National Defense

National Security and Law Enforcement

National economy

...

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