5.1.1. The essence of the state budget, its functions

As evidenced by the history of finance, the budget is not an institution inherent in the state at all stages of its development. The emergence of a budget is not associated with government expenditures and revenues as such, but with the introduction of a planning principle into the financial activities of the state (drawing up estimates of income and expenses for a certain period).

In English, budget means bag. During the approval by the House of Commons in England in the 16th – 17th centuries. subsidies to the king, before the end of the meeting, the Chancellor of the Exchequer opened a briefcase in which the paper with the corresponding bill was kept. This was called the opening of the budget; later the name of the portfolio was transferred to the document itself. From the end of the 17th century. The budget began to be called a document containing a plan for state revenues and expenditures approved by parliament.

The role of the budget in the development of the national economy has changed in different periods of history. In the era of classical capitalism, the state practically did not interfere in economic activity. At that time, in leading Western countries, about 10% of GDP was redistributed through the state budget.

In the second half of the 20th century. the budget has become a powerful regulator of macroeconomics. Currently, in Western countries, the budget is redistributing from a third to half of GDP . In Russia, this figure in recent years has been about 38%.

Budget as an economic category

The features of the budget as an economic category include the following:

• the state budget is a special form of redistribution relations associated with the separation of part of the national income in the hands of the state and its use to meet the needs of society;
• with the help of the budget, national income and national wealth are redistributed between sectors of the national economy, territories of the country, and spheres of public activity;
• the area of ​​budget distribution occupies a central place in the composition of public finances, since it is determined by the key position of the budget in comparison with other links.

The budget is the most important lever of influence on the process of social reproduction and stimulation of economic growth. By changing the level of government spending and taxation, the government can regulate the volume of aggregate demand (the amount of consumer and investment spending), and thereby influence short-term fluctuations in economic conditions. In this regard, a distinction is made between expansive (expansionary) and restrictive (restrictive) budget policies. The first of them is expressed in increasing government spending and reducing taxation, which makes it easier to overcome economic crises and accelerate economic growth. The second means reducing spending and increasing taxes, which helps reduce inflation and normalize the economic situation.

The main functions of the budget are as follows:

• formation of the main state fund of funds;
• use of funds from the main state monetary fund;
• control over the movement of budget resources, and on this basis - over the dynamics of economic development and the course of socio-economic processes in general.

In the process of functioning, budgetary relations receive their corresponding material embodiment through education budget fund of the country. The specific size of the budget fund depends on a number of factors:

• level of economic development;
• management methods at enterprises, institutions, organizations;
• the scale of planned structural changes in the proportions of the national economy, etc.

The set of budgetary relations for the formation and use of the country's budget fund also constitutes the concept of the state budget.

An essential feature of a budget is its planning. A budget is a plan for the state economy for the coming period.

The budget is a plan, but not the main financial plan of the state. The main financial plan of the state is a consolidated financial balance sheet, which reflects the entire set of financial resources mobilized in the country, as well as the directions of their expenditure. Budgetary resources are reflected in the consolidated financial balance sheet as part of it, centralized by government authorities.

5.1.2. Structure of the state budget. Budget income and expenses

Budget revenues reflect the economic relations that arise between the state and enterprises, organizations and citizens in the process of forming the budget fund. Budget expenditures represent the economic relations that arise between the state, on the one hand, and enterprises, organizations and citizens, on the other, in the process of distribution and use of budget fund funds in various areas.

With the help of income, the process of forming budget resources is carried out, while expenses mediate the process of their use. The withdrawal of part of the cost to the budget leads to a decrease in the material capabilities of business entities and the population to meet their needs. Budget expenditures, on the contrary, based on national resources increase these opportunities, and in some cases even completely satisfy some of them.

Socio-economic processes are influenced by specific forms, principles and methods of mobilizing and spending budget funds.

Budget revenues are generated from tax and non-tax revenues, as well as gratuitous transfers. The balance of funds at the end of the previous year is included in the budget revenues of the current year.

Tax income includes federal, regional taxes and fees of constituent entities of the Russian Federation, as well as local taxes and fees, as well as penalties and fines provided for by tax legislation. The revenues of the corresponding budget also fully take into account the amount of provided tax credits, deferments and installments for the payment of taxes and other obligatory payments to the budget.

Non-tax income includes:

• income from the use, sale or other alienation of property in state or municipal ownership;
• income from paid services provided by relevant government bodies, local governments, and budgetary institutions;
• funds received as a result of the application of civil, administrative and criminal liability measures, including fines, confiscations, compensation and other amounts of forced seizure;
• income in the form of financial assistance and budget loans received from budgets of other levels of the budget system of the Russian Federation;
• other non-tax revenues.

Among non-tax budget revenues, a special place is occupied by revenues associated with the circulation of budget funds in various segments of the financial market:

• funds received in the form of interest on budget balances in accounts with credit institutions;
• funds received from the transfer of property in state or municipal ownership, secured or in trust;
• funds from the repayment of government loans, budget credits and loans;
• part of the profit of state and municipal unitary enterprises remaining after paying taxes and other obligatory payments, etc.

Non-tax budget revenues also include financial assistance, gratuitous transfers, fines and other amounts of forced seizure.

Financial assistance from budgets at another level of the budget system refers to receipts in the form of grants, subventions and subsidies or other irrevocable and gratuitous transfer of funds.

Subsidies are budget funds provided to the budget of another level of the budget system of the Russian Federation, on a gratuitous and non-refundable basis to cover current expenses.

Subventions are budget funds provided to the budget of another level of the budget system of the Russian Federation or to a legal entity on a gratuitous and irrevocable basis for the implementation of certain targeted expenses.

Subsidies are budget funds provided to the budget of another level of the budget system of the Russian Federation, to an individual or legal entity on the basis of shared financing of targeted expenses.

According to the procedure and conditions of enrollment, budget revenues are divided into their own and regulating budget revenues.

Own (fixed) budget revenues- types of income assigned by the legislation of the Russian Federation on a permanent basis, in whole or in part, to the relevant budgets. Own budget revenues include: tax revenues assigned by the legislation of the Russian Federation to the corresponding budgets and budgets of state extra-budgetary funds; non-tax revenues in the list presented above; other non-tax income and gratuitous transfers.

Towards regulatory budget revenues These include federal and regional taxes and other payments for which standards for contributions are established (in percentage) to the budgets of constituent entities of the Russian Federation or local budgets for the next financial year, as well as on a long-term basis (for at least 3 years). The deduction standards are determined by the budget law of the level of the budget system that transfers regulating revenues, or the budget law of the level of the budget system that distributes regulating revenues transferred to it from the budget of another level.

Formation budget expenditures of all levels is based on uniform methodological foundations, standards of minimum budgetary provision, financial costs for the provision of public services established by the Government of the Russian Federation.

Depending on the economic content, budget expenditures are divided into capital and current.

Capital expenditure budgets designed to support innovation and investment activities.

Current budget expenditures are intended to ensure the current functioning of state authorities, local governments and budgetary institutions, as well as to provide state support to other budgets and individual sectors of the economy in the form of subsidies, subsidies and subventions. This category also includes other budget expenditures not included in capital expenditures.

The expenditure side of budgets at all levels of the budget system of the Russian Federation provides for the creation reserve funds executive authorities and local governments. The size of reserve funds in the federal budget cannot exceed 3% of approved federal budget expenditures.

The reserve funds are spent on financing unforeseen expenses, including emergency restoration work to eliminate the consequences of natural disasters and other emergencies that occurred in the current financial year, and the procedure for their expenditure is established by regulatory legal acts of the Government of the Russian Federation and executive authorities of the constituent entities Russian Federation or local governments.

The provision of budget funds is carried out in the following forms:

• allocations for the maintenance of budgetary institutions;
• funds to pay for goods, works and services performed by individuals and legal entities under state or municipal contracts;
• transfers to the population;
• budget loans to legal entities (including tax credits, deferments, etc.);
• subventions and subsidies to individuals and legal entities;
• investments in the authorized capital of existing or newly created legal entities;
• budget loans, grants, subventions and subsidies to budgets of other levels of the budget system of the Russian Federation, state extra-budgetary funds;
• loans to foreign countries, etc.

Budget loan is a form of financing budget expenditures that provides for the provision of funds to legal entities on a repayable and reimbursable basis.

A budget loan is budget funds provided to another budget on a repayable, gratuitous or reimbursable basis for a period of no more than six months within a financial year.

Transfers to the population- these are budget funds for financing mandatory payments to the population: pensions, scholarships, allowances, compensations, other social payments established by the legislation of the Russian Federation and its constituent entities, legal acts of local governments.

National expenses are financed exclusively from the federal budget:

• ensuring the activities of the President of the Russian Federation, the Federal Assembly of the Russian Federation, the Accounts Chamber of the Russian Federation, the Central Election Commission of the Russian Federation, federal executive bodies and their territorial bodies;
• functioning of the federal judicial system;
• carrying out international activities in the general federal interests;
• national defense and ensuring state security, implementing the conversion of defense industries;
• fundamental research and promotion of scientific and technological progress;
• servicing and repaying the government debt of the Russian Federation;
• other expenses.

Expenses related to the exercise of their powers are financed exclusively from the budgets of the constituent entities of the Russian Federation:

• ensuring the functioning of legislative (representative) and executive authorities of the constituent entities of the Russian Federation;
• servicing and repayment of public debt of the constituent entities of the Russian Federation;
• ensuring the implementation of regional target programs;
• maintenance and development of enterprises, institutions and organizations under the jurisdiction of government bodies of the constituent entities of the Russian Federation;
• other expenses.

The following functional types of expenses are financed exclusively from local budgets:

• maintenance of local government bodies;
• formation of municipal property and its management;
• organization, maintenance and development of educational, healthcare, cultural, physical culture and sports institutions, mass media, and other institutions that are municipally owned or administered by local governments;
• organization, maintenance and development of municipal housing and communal services;
• other expenses.

The following types of expenses are jointly financed from the federal budget, budgets of constituent entities of the Russian Federation and local budgets:

• state support for industries (with the exception of nuclear energy), construction and construction industry, agriculture, road and river transport, communications and road infrastructure, metro;
• ensuring law enforcement activities;
• research, development and design and survey work that ensures scientific and technological progress;
• ensuring social protection of the population;
• other expenses that are jointly managed by the Russian Federation, its constituent entities and municipalities.

The distribution and assignment of expenses between budgets of different levels of the budget system is carried out by agreement of the state authorities of the Russian Federation, its constituent entities and approved by the relevant laws on budgets, or by agreement of the state authority of the constituent entity of the Russian Federation and local government bodies located on the territory of this subject.

5.1.3. Budget classification

The most important component of the budget system is budget classification, which is a grouping of income and expenses of budgets of all levels, as well as sources of financing their deficits, drawing up and executing budgets and ensuring the comparability of their characteristics. Due to the exceptional complexity of budget as an economic category, various types of classification are used.

Income classification budgets of the Russian Federation is a grouping of budget revenues at all levels of the budget system and is based on legislative acts of the Russian Federation that determine the sources of their formation. Income groups consist of income items that combine specific types of income by sources and methods of receiving them.

Within the budget classification, functional, economic and departmental classifications of expenses are used.

Functional classification of expenses budgets of the Russian Federation is a grouping of budget expenditures at all levels of the budget system and reflects the direction of budget funds to perform the main functions of the state, including financing the implementation of regulatory legal acts adopted by government bodies of the Russian Federation and its subjects, to finance the implementation of certain state powers transferred to other levels of power.

The first level of the functional classification of budget expenditures of the Russian Federation is the sections that determine the expenditure of budget funds to perform state functions. The second level includes subsections that specify the direction of budget funds to perform state functions within the sections. The third level includes the classification of target items of federal budget expenditures, reflecting their financing in specific areas of activity of the main managers of federal budget funds within the subsections of the functional classification of budget expenditures of the Russian Federation. At the fourth level of classification, the directions for financing budget expenditures by target items are detailed.

Economic classification of expenses budgets of the Russian Federation is a grouping of expenditures of budgets of all levels according to their economic content.

The departmental classification of federal budget expenditures is a grouping of expenditures that reflects the distribution of budget funds among the main managers of budget funds; their list is approved by federal law.

Federal budget expenditures by the main managers of budget funds by sections, subsections, target items and types of expenditures of the functional classification of expenditures of the budgets of the Russian Federation, groups of expenditures, subject articles, sub-items and elements of expenditures of the economic classification of expenditures of the budgets of the Russian Federation are approved by the federal law on the federal budget for the next financial year.

Departmental classification expenses of budgets of constituent entities of the Russian Federation and local budgets is a grouping of budget expenses of the corresponding level and reflects the distribution of budget allocations among the main managers of budget funds by sections, subsections, target items and types of expenses of the functional classification, groups of expenses, subject articles, sub-items and elements of expenses of the economic classification.

The list of main managers of budget funds of constituent entities of the Russian Federation, managers of local budget funds is approved accordingly by the executive body of the constituent entity of the Russian Federation, local government body.

The budget classification of income and expenses of the budgets of the Russian Federation, sources of financing budget deficits is uniform for budgets of all levels of the budget system of the Russian Federation and is approved by federal law.

Classification of sources of financing budget deficits The Russian Federation is a group of borrowed funds attracted by the Russian Federation, its constituent entities and local governments to cover the deficits of the corresponding budgets.

According to the budget classification, sources of covering the budget deficit are identified, grouped into internal and external: loans from the Central Bank of the Russian Federation (inflationary source associated with the issue of money), issue and placement of government securities in the country and abroad, loans from commercial banks (domestic and foreign) , foreign governments and international financial organizations (IMF, IBRD, EBRD).

Budget classification also highlights state debt, in which all debt obligations are grouped into internal and external.

5.1.4. Budget deficit

Economic and financial science up to J. Keynes (1883 – 1946) considered the law of a budget deficit-free state.

If the proportionality between expenses and income is violated, then it is restored in two ways: by reducing costs or increasing income. Achieving budget balance is the most difficult financial and political task. To this day, the problems of balancing the budget and covering its deficit continue to be the subject of scientific and practical discussions.

When income exceeds expenses (surplus), then the excess income, if it is temporary and is obtained from random circumstances, can be used to meet emergency needs, form a reserve fund or for private economic capital expenditures. If the surplus is expected to be permanent, then it is recommended to lower taxes, since obtaining regular surpluses contradicts the essence and goals of financial management. It is much more difficult to solve the problem when expenses exceed income and there is a deficit. It can be caused by the following reasons: the need to implement large state programs for economic development, the militarization of the country, wars and natural disasters, economic crises, etc. In all these cases, state expenses increase sharply, exceeding its income.

There are structural and cyclical deficits. The deficit included in the structure of income and expenses when forming the budget is called structural. However, the real deficit may be greater than the structural one. The difference between the real and structural deficit is called the cyclical budget deficit. If the actually observed budget deficit is less than the structural one, the difference between the structural and real deficit is called cyclical surplus. In the case when, when forming a budget, an excess of revenues over expenses is taken into account, they speak of a surplus of budget revenues.

The level of the state budget deficit is determined by the ratio of the absolute value of the deficit to the volume of the budget for expenditures or to the volume of GNP. Many economists consider the financial situation of a country to be normal if the budget deficit does not exceed 2–3% of GNP.

A deficit is considered temporary if there are prospects for overcoming it and it does not amount to more than 3% of GDP. If the budget deficit is up to 10% of the amount of income, this is an acceptable deficit, but if it is more than 20% of the amount of income, this is a critical deficit.

The world practice of economic development indicates that the budget deficit itself is not terrible for the country’s economy. But at the same time, it is very important that all of it, or at least most of it, falls on the development budget. State investments in the economic development of the country do not have to be fully covered by the state’s own revenues in the current financial year; they may well be covered by borrowed funds (Central Bank loans, bond issues, foreign loans), since these investments imply additional returns from the economic activities of enterprises of all forms of ownership. Thus, the development budget deficit as a whole does not disrupt the normal course of economic processes if there is a really functioning mechanism for identifying the relationship between budget deficit planning and large capital investments in economic development.

A completely different picture emerges if most of the state budget deficit falls on the current expenditure budget (this is the distribution of the deficit that is typical for the Russian budget today). This means an increase in unsecured public debt, and it is fraught with the most serious social consequences.

The Budget Code of the Russian Federation regulates the conditions that counteract the emergence of budget deficits and defines its boundaries. Thus, current expenses of the budget of a constituent entity of the Russian Federation or local budget cannot exceed the amount of revenue of the corresponding budget. The size of the federal budget deficit cannot exceed the total volume of budget investments and expenses for servicing the public debt of the Russian Federation.

The size of the budget deficit of a constituent entity of the Russian Federation cannot exceed 5% of the volume of budget revenues of a constituent entity of the Russian Federation without taking into account financial assistance from the federal budget. The size of the local budget deficit cannot exceed 3% of local budget revenues without taking into account financial assistance from budgets of other levels.

Each budget level is assigned by law its own sources of financing the budget deficit.

There are three main concepts for regulating the budget deficit. Representatives of the first group believe that the budget should be balanced annually, that is, every financial year there should be equality between income and expenses. However, this state of the budget limits the possibility of fiscal regulation, which consists of deliberate changes in spending and taxation depending on the state of the economy, which leads to either a budget deficit or a surplus.

Proponents of the second concept believe that the budget should be balanced during the economic cycle, and not annually. During periods of production decline, the government increases spending, which leads to an increase in the deficit. But during a period of economic growth, it reduces expenses, which increases surplus income. As a result, at the end of the industrial cycle, the surplus income will cover the deficit that resulted from the decline in production. The problem is that the decline in production and its rise can be of different durations and depths. If the recession is long and the recovery is short, the budget deficit will remain.

The third concept is the concept of functional finance. Its representatives argue that the main goal of public finance is to ensure macroeconomic balance, even if this leads to a state budget deficit. In their opinion, firstly, macroeconomic equilibrium will cause economic growth, and this will increase national income, and therefore tax revenues to the budget; secondly, the government can always raise taxes, issue more money and therefore eliminate the deficit; thirdly, the budget deficit does not negatively affect economic development.

5.2. Budget process

5.2.1. Budget process

Budget process- this is the activity of state and local authorities regulated by law in the preparation, consideration, approval and execution of state and local budgets (in federal states - and the budgets of members of the federation).

The budget process covers individual stages of budget activity - drafting a budget, its consideration and approval by legislative bodies, budget execution; drawing up a report on budget execution and its approval by parliament. The duration of the budget process can be up to two or more years, depending on the duration of its preparation and consideration in the legislative body, and, together with the approval of the report, over three years.

Work on drawing up a draft budget begins 12 - 18 months before the start of the new budget year (in France - 14 months, in the USA - 18 months). The development of the draft budget is carried out by the Ministry of Finance (Treasury), and in the USA - by the Office of Management and Budget under the President, which is also entrusted with control over budget execution. Work on drawing up a draft budget begins with the preparation by the Ministry of Finance (in the USA - the Office of Management and Budget) of directive instructions to the heads of ministries and departments with a proposal to submit by a certain date a calculation of estimates of expenses and revenues.

Budget year or period is the time that elapses between the opening and closing of government accounting. At the beginning of the twentieth century. the financial year coincided with the calendar year in many countries - in France, Austria-Hungary, Belgium, Holland, Luxembourg, Sweden, Russia, Finland, etc. At the end of the twentieth century. There is a difference in the start dates of the financial year. In the USA it begins on October 1 and ends on September 30 of the next calendar year, respectively, in Sweden July 1 - June 30, in Japan - April 1 - March 31. Only Russia still maintains the old tradition, in which the beginning of the financial year coincides with the calendar year.

There is the concept of “grace period” - the time provided to complete the financing of individual objects and close financial accounts. This period varies across countries from one to five months. During this time, the government has the right to finance from funds allocated for the already ended budget year, without asking for new permissions. The budget year, including the grace period, forms the accounting period, which refers to the actual period of budget execution.

The budget process in the Russian Federation is regulated by:

• Budget Code of the Russian Federation;
• the relevant law of the subject of the Federation;
• relevant legal acts of the local government.

The Budget Code of the Russian Federation, which is the basic document regulating budget activities, distinguishes the following stages of the budget process: drawing up draft budgets; review and approval of budgets; execution of budgets; preparation, review of the report and approval of the budget execution report.

The activities of government bodies from the beginning of drawing up the budget to the approval of the report on its implementation lasts about 3.5 years. This period is called the budget cycle.

The organization of the budget process is based on the general principles of organizing the budget system:

• unity of the budget system;
• differentiation of income and expenses between the levels of the budget system of the Russian Federation;
• independence of budgets;
• equality of budgetary rights of constituent entities of the Russian Federation, municipalities;
• completeness of reflection of income and expenses;
• budget balance;
• efficiency and economy in the use of budget funds;
• general coverage of budget expenses;
• publicity;
• reliability;
• targeting and targeted nature of budget funds.

Participants in the budget process are:

• President of the Russian Federation;
• bodies of legislative (representative) power;
• executive authorities (highest officials of the constituent entities of the Russian Federation, heads of local government, financial authorities, bodies collecting budget revenues, other authorized bodies;
• monetary authorities; state and municipal financial control bodies;
• chief managers and administrators of budgetary funds;
• other bodies entrusted with budgetary, tax and other powers by the legislation of the Russian Federation and its constituent entities.

Participants in the budget process also include budgetary institutions, state and municipal unitary enterprises, other recipients of budgetary funds, as well as credit organizations that carry out individual operations with budget funds.

Granted special budgetary powers Ministry of Finance of the Russian Federation, which:

• draws up a draft federal budget and submits it to the Government of the Russian Federation, and also takes part in the development of draft budgets of state extra-budgetary funds;
• provides methodological guidance in the field of drafting the federal budget and its implementation;
• develops, on behalf of the Government of the Russian Federation, the Program of State Internal Borrowing of the Russian Federation, conditions for the issue and placement of government loans, acts as an issuer of government securities, registers the issue of government securities of constituent entities of the Russian Federation and municipal securities;
• manages the public debt of the Russian Federation;
• organizes the execution of the federal budget, as well as the budgets of the constituent entities of the Russian Federation and local budgets in the event of concluding relevant budget agreements;
• carries out preliminary and current control over the execution of the federal budget, as well as the budgets of the constituent entities of the Russian Federation and local budgets in the event of concluding relevant budget agreements, etc.

Particular responsibility for the organization and direct execution of the budget process is assigned to Federal Treasury. It is responsible for:

• correct execution of the federal budget, maintaining accounts and managing budget funds;
• financing expenses associated with the provision of budget loans, budget investments, etc., monitoring compliance with the budget legislation of the Russian Federation by the main managers, managers and recipients of budget funds, credit organizations;
• execution of orders of the Accounts Chamber of the Russian Federation and decisions of acts of judicial authorities on compensation for damage caused by financial authorities to recipients of budget funds, etc.

5.2.2. Drafting budgets

When drawing up a draft budget, the following main tasks are set:

• ensuring consistency of financial and other resources with the economic and social programs of the Government;
• establishing the necessary proportions and priorities in spending funds.

When developing a draft budget, various methods of calculating income and expenses are used, which have undergone significant changes in historical terms. At the beginning of this century, the budget of most countries was formed by the “incremental” method, i.e., the budget of the previous year was taken as a basis and a certain percentage of the increase was applied to it. This increase was usually calculated as a base in real terms (i.e. adjusted for inflation) plus a small percentage due to real growth.

In the period from mid-1970 to the early 1990s. most democracies have put into practice the basic elements program financing systems:

• classification of expenses by functional programs, regardless of the administrative mechanism of expenditure;
• specifying program goals with modifiable results;
• measurement and evaluation of results taking into account the set goals;
• budget forecasts for 3 – 5 years.

Program-target method provides for systematic adjustment of decisions made in accordance with ongoing changes in the political, economic, social and other spheres, which required leading Western countries to have and operate large government information centers. According to this method, a multivariate budget is developed, which is generally linked to the country’s economic programs, taking into account general development prospects.

The preparation of draft budgets is preceded by the development of forecasts for the socio-economic development of the Russian Federation, its constituent entities, municipalities and sectors of the economy, as well as the preparation of consolidated financial balances, on the basis of which executive authorities develop draft budgets.

Draft budgets are drawn up taking into account the need to achieve minimum state social standards based on standards of financial costs for the provision of state or municipal services in accordance with other norms (standards) established by law, as well as legal acts of local governments.

Minimum state social standards- these are public services, the provision of which is guaranteed by the state to citizens on a gratuitous and irrevocable basis through funding from the budgets of all levels of the budget system of the Russian Federation and the budgets of state extra-budgetary funds at a certain minimum acceptable level throughout Russia.

Under minimum budgetary provision refers to the minimum acceptable cost of state and municipal services in monetary terms, provided by state authorities or local governments per capita at the expense of the relevant budgets.

Based on the forecast of the country's socio-economic development and the consolidated balance of financial resources, the main directions of budget policy for the next financial year are determined, which constitute the content of the Budget Message of the President of the Russian Federation to the Federal Assembly of the Russian Federation (it is sent no later than March of the year preceding the next financial year). The direct work on drawing up the draft budget begins with the Budget Message.

Direct preparation of draft budgets is carried out by the Ministry of Finance of the Russian Federation, financial authorities of the constituent entities of the Russian Federation and municipalities.

Budgeting is based on:

• Budget message of the President of the Russian Federation;
• forecast of socio-economic development of the relevant territories for the next financial year;
• the main directions of the budget and tax policy of the relevant territory for the next financial year;
• forecast of the consolidated financial balance for the relevant territory for the next financial year;
• development plan of the state or municipal sector of the economy of the relevant territory for the next financial year.

The development and approval of the federal budget for the next financial year is completed no later than July 15 of the year preceding the planned year.

The draft law (decision) on the budget must contain:

• main characteristics of the budget (total budget revenues and expenditures, budget deficit), as well as projected budget revenues by groups, subgroups and articles of classification of budget revenues of the Russian Federation and standards for deductions from the budget’s own revenues transferred to budgets of other levels of the budget system of the Russian Federation;
• budget expenditures by sections and subsections of the functional classification of budget expenditures of the Russian Federation; the total volume of capital and current budget expenditures; expenses and income of target budget funds; volumes of financial assistance to budgets of other levels of the budgetary system of the Russian Federation, provided in the form of grants and subventions, in the context of budgets receiving this financial assistance;
• distribution of budget allocations among the main managers of budget funds in accordance with the departmental structure of expenditures of the corresponding budget;
• sources of financing the budget deficit through state or municipal internal borrowings;
• the upper limit of state or municipal debt as of January 1 of the year following the next financial year;
• the limit on the provision of state or municipal guarantees to third parties for borrowing, and others.

5.2.3. Review and approval of the budget

Associated with the stage of budget consideration and approval is the concept budget initiative– the right to make certain changes to the draft budget. There are three types of it: government, parliamentary and mixed.

Government Budget Initiative limits the rights of parliament: either the draft budget is approved as a whole, or it is rejected (Great Britain).

Parliamentary initiative provides for the right of members of parliament to make corrections to the draft during its consideration in order to then approve this revised draft (USA).

At mixed budget initiative, widespread in Western European countries, as well as in Russia, amendments to the draft budget can be made by both the government and parliament.

The Government of the Russian Federation, the authorities of the constituent entities of the Russian Federation and local self-government submit an updated draft budget to the appropriate representative body. On all financial issues and to work with the budget in particular, representative authorities at different levels form special committees and commissions. The State Duma Committee on Budget, Taxes, Banks and Finance has been created in the State Duma; in the Federation Council - the Federation Council Committee on Budget, Financial, Currency and Credit Regulation.

The Central Bank of the Russian Federation presents to the State Duma a draft of the main directions of monetary policy for the next year, agreed with the Government of the Russian Federation.

The Government of the Russian Federation submits to the State Duma a draft law on the federal budget for the next financial year no later than August 15 of the current year. In case of disagreements regarding the draft budget, government bodies at different levels form a conciliation commission.

The State Duma is considering the draft law on the federal budget in several readings. This is the traditional approach for all democratic states. Before considering the draft federal law on the budget in the first reading, the committees and commissions of the Duma submit to the Duma Committee on Budget, Taxes, Banks and Finance their conclusions on this bill, on the basis of which the said Committee prepares an opinion on the draft budget and submits it for consideration by the Duma.

In the first reading, deputies discuss its concept and forecast for the socio-economic development of the Russian Federation for the next year, the main directions of budget and tax policy, the basic principles and calculations on the relationship between the federal budget and the budgets of the constituent entities of the Russian Federation, the draft program of state external borrowings of the Russian Federation regarding sources of external financing of the deficit the federal budget, as well as the main characteristics of the federal budget, which include: federal budget revenues by groups, subgroups and articles of classification of budget revenues of the Russian Federation; distribution of federal taxes and fees between the budgets of the constituent entities of the Russian Federation; federal budget deficit and sources of covering it; total expenses. Committees of the State Duma prepare and send to the Budget Committee opinions on the said bill and proposals for the adoption or rejection of the said bill.

If the draft federal law on the budget is rejected in the first reading, the State Duma can either transfer the bill to a conciliation commission consisting of representatives of the Duma, the Federation Council and the Government of the Russian Federation to clarify the main characteristics of the federal budget, or return it to the Government of the Russian Federation for revision, or put the question of trust in the Government of the Russian Federation. If the draft federal budget is submitted to the conciliation commission, it develops an agreed version of the main characteristics of the federal budget for the next year and submits the draft law on the federal budget for consideration by the State Duma again in the first reading.

The decision of the conciliation commission is made by separate voting of its members from the State Duma, the Federation Council, and the Government of the Russian Federation. A decision is considered adopted by a party if the majority of representatives of that party present at the meeting of the conciliation commission vote for it. The voting results of each party are counted as one vote. A decision is considered agreed upon if it is supported by three parties. A decision to which at least one party objects is considered inconsistent.

Based on the results of consideration in the first reading of the draft law on the federal budget, a resolution of the State Duma is adopted on the adoption in the first reading of the draft federal law on the federal budget.

If the State Duma does not make a decision based on the results of the work of the conciliation commission, the draft law on the federal budget is considered to be rejected again. Repeated rejection of the draft federal budget is possible only if the State Duma raises the question of confidence in the Government of the Russian Federation. If the federal budget for the next financial year is returned for revision to the Government of the Russian Federation, then it is finalized within 20 days, taking into account the proposals and recommendations set out in the conclusions of the budget and economic policy committees, and the revised bill is submitted for re-examination by the Duma in the first reading. When this bill is reintroduced, the State Duma considers it in the first reading within 10 days from the date of reintroduction.

In the event of the resignation of the Government of the Russian Federation in connection with the rejection of the draft law on the federal budget, the newly formed Government of the Russian Federation presents a new version of the draft law on the federal budget for the next financial year no later than 30 days after its formation.

When the State Duma considers the draft law on the federal budget in the second reading, federal budget expenditures are approved in sections of the functional classification of expenditures of the budgets of the Russian Federation within the total volume of the federal budget approved in the first reading, and the size of the Federal Fund for Financial Support of the Subjects of the Russian Federation. The State Duma considers the budget law in the second reading within 15 days from the date of its adoption in the first reading.

It is in the second reading that the Duma sends to the executive and representative authorities of the constituent entities of the Federation information on the distribution of income from federal taxes and fees between the budgets of the Russian Federation, approved at the first reading, as well as on the size of the Federal Fund for Financial Support of the constituent entities of the Russian Federation and the distribution of its funds, approved in the second reading. If the budget is rejected in the second reading, it is transferred to the conciliation commission.

When considering the draft federal law on the federal budget for the next year in the third reading, federal budget expenditures are approved by subsections of the functional classification of budget expenditures of the Russian Federation and the main managers of federal budget funds for all four levels of the functional classification of budget expenditures of the Russian Federation. The distribution of funds from the Federal Financial Support Fund for all constituent entities of the Russian Federation, the costs of financing federal target programs, etc. are considered. Subjects of the right of legislative initiative send their amendments on the third reading to the Duma Budget Committee. The State Duma considers the draft budget law in the third reading within 25 days from the date of adoption of the said bill in the second reading.

Then the State Duma considers the draft law on the federal budget in the fourth reading within 15 days from the date of adoption of the said bill in the third reading. At this stage of consideration of the draft budget, the bill is voted on as a whole and amendments are not allowed. The law on the federal budget for the next year adopted by the Duma is submitted to the Federation Council for consideration within five days after its adoption. After voting in the fourth reading in the Duma, the draft budget law becomes law.

The Federation Council considers the federal law on the federal budget for the next financial year within 14 days from the date of its submission by the State Duma; in this case, the law is voted on as a whole for approval. The law approved by the Federation Council is sent to the President of the Russian Federation within five days for its signing and promulgation.

If a federal law is rejected by the Federation Council, it is sent to the conciliation commission. The conciliation commission submits the federal budget law for reconsideration by the Duma within 10 days. The State Duma is reconsidering the budget law in one reading.

If the State Duma disagrees with the decision of the Federation Council, the law on the federal budget is considered adopted if at least two-thirds of the total number of Duma deputies vote for it during the second vote.

If the President of the Russian Federation rejects the law on the federal budget for the next financial year, this law is transferred to the conciliation commission. In this case, a representative of the President of the Russian Federation is included in the conciliation commission.

If the federal law on the federal budget for the next financial year does not come into force before the beginning of the year (if the Duma does not adopt the draft federal law on the federal budget for the next financial year before December 1 of the current year, as well as if the law on the federal budget does not come into force for next financial year for other reasons before January 1 of the next year), the Duma may adopt a law on financing expenses from the federal budget in the first quarter of the next financial year. In this case, federal executive authorities spend federal budget funds in accordance with the specified federal law.

On the territory of each subject of the Federation and municipality, the procedure and conditions for consideration and approval of the budget are established by representative authorities, which adopt independent regulations on the budget process in the corresponding territory. Nevertheless, each of these acts must comply with the general principles of the budget process and the rules for the preparation, consideration and approval of the federal budget.

5.2.4. Budget execution

After the budget is approved, the third stage of the budget process begins - budget execution. It covers the receipt of approved revenues, mainly taxes, and the implementation of budget expenditures, i.e. payments in accordance with allocated appropriations. The organization of the execution of the budget revenues and control over its implementation is entrusted to the Ministry of Finance.

The most important element of this stage of the budget process is cash budget execution, i.e., organizing the collection of budget funds in the country, their storage and issuance, as well as accounting and reporting.

There are three systems for organizing cash budget execution: treasury, banking and mixed. Under the treasury system, the state treasury receives income, makes expenses and deposits balances into special accounts in banks. The Treasury acts in this case as both a cashier and a banker. In a banking system, cash execution is transferred to the central bank of issue.

The cash execution of the budget is based on the principle of cash unity, which means that all revenues collected in the country go to a single account from which all allocations are made in accordance with approved expenses, which allows the Ministry of Finance to exercise constant control over the receipt of funds, cash flow, prevent cash gaps.

In the process of executing the federal budget, it is prohibited to carry out transactions that bypass the system of balance sheet accounts of the Federal Treasury. The right to open and close federal budget accounts and determine their regime belongs to the Federal Treasury. The single account of the federal budget (single account of the Federal Treasury) is located in the Bank of Russia.

Federal Treasury accounts with the Bank of Russia and credit institutions are maintained on the basis of agreements. Opening and closing accounts of the federal budget, changing their regime without a corresponding decision of the Federal Treasury are not allowed.

The execution of the budget in terms of income is carried out by the Ministry of Finance, and in terms of expenses - by the relevant line ministries and departments.

Execution of the budget by income provides for:

• transfer and crediting of budget revenues to a single account of the federal budget;
• distribution in accordance with the approved budget of federal regulatory taxes;
• return of overpaid amounts of income;
• accounting of federal budget revenues and reporting in accordance with the budget classification of the Russian Federation.

To execute the budget for expenses means to finance the expenses provided for in the budget in accordance with the budget schedule.

In terms of expenditures, the budget is executed by special entities - participants in budgetary legal relations, called chief manager of budget funds, managers of budget funds, recipients of budget funds.

Chief manager of federal budget funds is a government body of the Russian Federation that has the right to distribute federal budget funds to subordinate managers and recipients of budget funds, determined by the departmental classification of federal budget expenditures. The recipient of budget funds is a budget institution or other organization that has the right to receive budget funds in accordance with the budget schedule for the corresponding year.

Execution of budgets at all levels is carried out by authorized executive bodies on the basis budget list. The budget list is compiled by the main manager of budget funds according to their managers and recipients on the basis of the approved budget in accordance with the functional and economic classifications of budget expenditures of the Russian Federation with a quarterly breakdown and is submitted to the executive authority responsible for drawing up the budget within 10 days from the date of its approval.

Based on the budget lists of the main managers of budget funds, the Minister of Finance of the Russian Federation draws up a consolidated budget list of the federal budget. The approved consolidated budget list of the federal budget is transferred for execution to the Federal Treasury and sent for information to the Federal Assembly and the Accounts Chamber of the Russian Federation.

The Federal Treasury maintains a consolidated register of recipients of federal budget funds and the General Ledger of the Treasury, which records all transactions related to the receipt of income into the federal budget and receipts from sources of financing the federal budget deficit, as well as the authorization and financing of federal budget expenditures.

The work on executing budgets at all levels, i.e. the budget (financial) year, ends in the Russian Federation on December 31. Budget commitment limits expire on December 31.

5.2.5. Budget control

The following forms of financial control are provided, implemented during the budget process:

• preliminary control- during the discussion and approval of draft laws (decisions) on the budget and other draft laws (decisions) on budgetary and financial issues:
• current control- during the consideration of individual issues of budget execution at meetings of committees, commissions, working groups of legislative (representative) bodies, representative bodies of local self-government during parliamentary hearings and in connection with parliamentary requests;
• subsequent control- during the consideration and approval of reports on budget execution.

Financial control exercised by executive authorities and local governments is carried out by the Ministry of Finance of the Russian Federation, the Federal Treasury, financial authorities of the constituent entities of the Russian Federation and municipalities, chief managers, and managers of budget funds.

The forms and procedure for exercising financial control are established by the Budget Code of the Russian Federation, other acts of budget legislation and regulatory legal acts of the Russian Federation, its constituent entities and local governments.

The Federal Treasury exercises preliminary and current control over the conduct of operations with budgetary funds of the main managers, administrators and recipients of budgetary funds, credit institutions, other participants in the budget process for executing budgets and budgets of state extra-budgetary funds, interacts with other federal executive authorities in the process of implementing this control and coordinates their work.

The Ministry of Finance of the Russian Federation exercises internal control over the use of budgetary funds by the main managers, administrators and recipients of budgetary funds. In some cases, the ministry exercises financial control over the execution of budgets of constituent entities of the Russian Federation and local budgets. The Ministry of Finance of the Russian Federation organizes financial control, inspections and audits of legal entities - recipients of guarantees from the Government of the Russian Federation, budget loans, budget loans and budget investments.

The main managers, managers of budgetary funds exercise financial control over the use of budgetary funds by recipients of budgetary funds in terms of ensuring the intended use and timely return of budgetary funds, as well as the submission of reports and payment of fees for the use of budgetary funds. The main managers of budget funds conduct inspections of subordinate state and municipal enterprises and budgetary institutions.

The budget process ends with the preparation and approval of a report on budget execution, which is an important form of control over its implementation. Reports on the execution of the federal and consolidated budget for the past year are prepared by the Ministry of Finance of the Russian Federation and submit them to the Government of the Russian Federation.

In the constituent entities of the Federation and municipalities, a report on budget execution is drawn up by financial authorities and then submitted to the executive authorities, which submit it to the representative authorities within the prescribed period.

Every year, no later than June 1 of the current year, the Government of the Russian Federation submits to the State Duma and the Accounts Chamber of the Russian Federation a report on the execution of the federal budget for the reporting financial year in the form of a federal law, as well as reports on the execution of the budgets of federal target budget funds.

The Accounts Chamber of the Russian Federation audits the report on the execution of the federal budget for the reporting financial year within 1.5 months after the submission of the said report to the State Duma, using the materials and results of the audits and audits carried out, and prepares a conclusion on the report. The State Duma considers the report on the execution of the federal budget within 1.5 months after receiving the conclusion of the Accounts Chamber of the Russian Federation.

Based on the results of consideration of the report on the execution of the federal budget and the conclusion of the Accounts Chamber of the Russian Federation, the State Duma makes one of the following decisions: on approval of the report on the execution of the federal budget; on the rejection of the report on the execution of the federal budget.

The following measures may be applied to violators of budget legislation: a warning about improper execution of the budget process, blocking of expenses, withdrawal of budget funds, suspension of transactions on accounts in credit institutions, imposition of a fine, accrual of penalties, and other measures in accordance with the Budget Code and federal laws.

5.3. Budget system, interbudgetary relations

5.3.1. Budget structure and budget system of the country. Models for constructing a budget system in federal and unitary states

Budget system – This is, based on economic relations and legal norms, a set of all types of budgets operating in the country.

Budget device – This is the organization of the budget system, the principles of its construction.

The budget structure is determined by the state structure. The administrative-territorial division of the country determines the number of links in the budget system, since each government body, according to the Constitution of the country, has the right to its own budget. In unitary (unified) states, the budget system has two parts: the state budget and numerous local budgets. In federal states, the budget system consists of three links: the state budget (federal budget, or the budget of the central government), budgets of members of the federation, local budgets.

IN unitary state The government body can be single or multi-level, but control over the performance of government functions is assigned to the government at the center. In many unitary states, local governments have some tax powers, but they are insignificant and under the control of the center, and the funds they collect are also strictly controlled. The political and budgetary powers of lower levels of government in a unitary state are limited to those set by the government at the center.

A federation is a form of government in which the federal units within the state - members of the federation, for example, lands, states, have their own constitutions, legislative, executive and judicial bodies. Along with this, unified - federal - government bodies are formed, a single citizenship, monetary unit, etc. are established. The following are characteristic of a federation:

• hierarchy of governing bodies;
• division of powers between all levels;
• institutionalized autonomy and a certain degree of independence at each level.

The federal structure provides not only decentralized decision-making, but also the distribution of powers and the division of power, which is more important. Under a federal government, each level of government has its own rights and powers, and governing bodies are elected.

5.3.2. Budget regulation

There are 4 groups of budget regulation methods.

1. Establishment and distribution of regulatory sources of budget revenue.
2. Redistribution of budget sources themselves.
3. Free assistance provided to lower-level budgets at the expense of higher-level budgets.
4. Loans allocated to one budget from funds from other budgets.

The main method of budget regulation is the establishment and distribution of regulatory sources of budget revenue. This is predetermined by the fact that all other methods of budget regulation are applied only if the use of regulatory revenues does not lead to the desired result.

Regulatory sources of income are determined by the representative authorities of territories at a higher level. For example, the constituent entities of the Russian Federation, having a certain budgetary independence, through their representative authorities, can, in addition to the federal ones, determine their own regulatory sources.

The distribution of regulatory sources of income between budgets is carried out through approved standards for deductions from these incomes. Such standards are approved by higher bodies of representative power within their competence for budgets of lower territorial levels. Both uniform deduction standards can be approved for all or corresponding groups of national-state and administrative-territorial entities, as well as differentiated ones (for each such entity). Differentiated and unified deduction standards can be approved simultaneously for different types of regulatory income.

The law provides that an actual increase in the level of fixed income in the current financial year, resulting from financial and economic activities or the introduction of local taxes and fees, cannot serve as a basis for reducing the standards of deductions from regulatory income for the next financial year without the consent of the relevant representative government body.

Methods of redistribution of budget sources themselves include:

• assignment by a higher representative body of power to the budget of the corresponding lower territorial level in full or in a firmly fixed percentage on a long-term basis (for at least 5 years) of any regulatory revenues;
• transfer by higher representative authorities to the budget of the corresponding lower level of their assigned income.

Methods of redistribution of budget sources are applied only if the fixed and regulating budget revenues of a lower territorial level in their totality constitute less than 70% of its revenue.

In the process of budget regulation, methods of gratuitous assistance provided to lower-level budgets at the expense of higher-level budgets are actively used. This group of methods includes: subsidies, as well as transfers - normative-share subsidies, subventions and subsidies.

The fourth group of methods includes loans allocated to one budget from funds from other budgets. For example, the legislation of the Russian Federation provides for the possibility of redistributing budget funds through budget loans, and in the event of insufficient budget funds to cover expenses above the minimum budget, as well as in cases of temporary financial difficulties in the process of budget execution, executive authorities can receive interest-bearing or interest-free loans from other budgets. The law does not bind the receipt and provision of budget loans to any level framework, for example, only from a higher budget to a lower one; therefore, such a loan can be provided from a budget of any level to a budget of any level, including from a lower to a higher one, if it has such opportunity.

A budget loan is financial assistance, but unlike a subsidy or subsidy, it is repayable and can be reimbursable, that is, with the payment of interest for using it. The fundamental difference between a budget loan and the methods of the previous 3 groups is that, as a method of budget regulation, it is used at the stage of budget execution, while all others are used at the stages of its formation.

5.3.3. Fiscal federalism

The problem of delimitation of powers between the federation, subjects of the federation and local authorities is decisive in the formation of budgetary federalism. The theory of fiscal federalism is aimed at finding a model of budget structure that would make it possible to maximally satisfy the needs of the population for public services, regardless of what level they may be at.

In the Budget Code of the Russian Federation fiscal federalism characterized as the relationship between government bodies of the Russian Federation and government bodies of the constituent entities of the Russian Federation regarding the delimitation of budgetary powers, expenses and income, the distribution and redistribution of the latter between the federal budget and the consolidated budgets of the constituent entities of the Russian Federation, based on the combination of national interests and the interests of the population living in the territory of the constituent entities of the Russian Federation and its constituent municipalities.

Fiscal federalism presupposes:

• a clear delineation of budget responsibility, budget revenues and spending powers between different levels of government;
• high independence of budgets at their management levels;
• ensuring vertical and horizontal balance of lower budgets;
• carrying out a unified tax and budget policy coordinated with the federal center;
• equality of budgetary rights of subjects of the Russian Federation.

The general principles of Russian fiscal federalism are defined by the Constitution of the Russian Federation, the Federal Treaty, the Budget and Tax Code, as well as other legislative acts. These principles are:

• differentiation of the budget system of the Russian Federation into federal, regional and local budgets and their equal existence;
• joint establishment of general principles of taxation of the Russian Federation with the constituent entities of the Russian Federation;
• distribution of taxes between levels of the budget system, based on the criteria of sufficiency to cover expenses determined by the legislatively assigned subjects of jurisdiction and powers for each level of government;
• vesting regional and local authorities with the right to independently draw up, review, and execute budgets;
• regulation of territorial development through a special target fund created in the federal budget, allocation of loans, transfers;
• vesting the legislative authorities of the constituent entities of the Russian Federation with the right of legislative initiative in the field of budget structure, budget process and fiscal policy in the Russian Federation.

Any model of fiscal federalism is characterized by three main conditions for its effective functioning:

• a clear division of powers between all levels of government regarding expenditures;
• providing the relevant levels of government with sufficient sources of income to implement these powers;
• smoothing vertical and horizontal imbalances in income and expenditure of lower budgets using a system of guarantors (for example, transfers).

Three types of models of fiscal federalism can be distinguished:

• centralized;
• decentralized (for example, USA);
• combined (for example, Russia).

At centralized type The division of powers between levels of government regarding expenditures, as a rule, is not accompanied by endowing them with sufficient own sources of income. Under these conditions, financing of territorial programs is carried out at the expense of centralized funds from the federal budget using various forms of interbudgetary relations. Here, the independence of functioning of lower levels of the budgetary sphere is reduced to a minimum.

Decentralized types budget system organizations are built on the recognition of a high degree of independence of regional and local budgets. Financial assistance from higher budgets is kept to a minimum. The powers in the sphere of expenditures are adequate to the powers in the sphere of revenues. With this organization, pursuing a unified financial and economic policy within the state is very difficult.

Decentralization of power allows us to more sensitively capture the socio-economic, ethnic and cultural characteristics of the population. The complexity of the problem lies in finding the line beyond which the decentralization of power leads to the inevitable opposition of the interests of the subjects of the federation to the state as a whole.

For combined model Budget federalism is characterized by the following points:

• use of the mechanism of horizontal and vertical budget equalization;
• increased responsibility of the federal center for creating conditions for the socio-economic development of regions, which inevitably limits the independence of regional authorities and necessitates control by federal authorities;
• the significant role of budget transfers from higher budgets to lower ones for regulation and budgetary equalization of regions.

Vertical alignment implies the process of finding a correspondence between the volume of expenditure obligations of each level of government with its revenue sources and compensating for the imbalance of regional budgets through transfers; it means, in essence, the insufficiency of revenues from own sources to the budget of any level to cover the costs associated with the provision of socially significant services to the population.

Horizontal alignment involves a proportional distribution of the tax burden between the subjects of the federation to eliminate or at least reduce the inequality of tax opportunities of different territories, as well as taking into account the differentiation of the population in terms of the level of average per capita budget income and leveling regional differences in the cost of living, cash income and expenses of the population.

The experience of developed countries with a federal structure shows that to ensure the effective functioning of any model of fiscal federalism, at least three conditions must be met, namely:

• unambiguous delimitation and legislative consolidation of powers between all levels of government regarding expenditures;
• providing the relevant levels of government with sufficient sources of income to carry out these powers;
• vertical and horizontal budgetary alignment using the mechanism of interbudgetary relations.

conclusions

• The budget as an economic category expresses a system of imperative monetary relations between the state and other subjects of reproduction in the process of formation of the main state fund of funds and its use to satisfy the most important needs of social reproduction at this stage of development.
• The concept of the state budget is also a set of budgetary relations for the formation and use of the country's budget fund.
• As a financial plan, the budget is a legally formalized document that quantitatively reflects the process of formation and distribution of monetary resources by the state necessary to perform its main functions.
• The functioning of the state budget occurs through the existence of special economic forms - income and expenses, expressing successive stages of redistribution of the value of the social product, concentrated in the hands of the state.
• The most important component of the structure of the budget system is the budget classification, which is a grouping of income and expenses of budgets of all levels, as well as sources of financing their deficits, drawing up and executing budgets and ensuring the comparability of their characteristics.
• The budget deficit is the excess of government spending over revenue. There are different types of budget deficit depending on its nature and size.
• The budget process is the activity of state and local authorities regulated by law in the preparation, consideration, approval and execution of state and local budgets (in federal states - and the budgets of members of the federation)
• The budget system is, based on economic relations and legal norms, a set of all types of budgets operating in the country.
• The budget structure is the organization of the budget system, the principles of its construction.
• According to the legislation of the Russian Federation, budget regulation, being an integral part of the budget process, represents a private redistribution of financial resources between budgets of different levels.
• Fiscal federalism is characterized as the relationship between government bodies of the Russian Federation and government bodies of the constituent entities of the Russian Federation regarding the delimitation of budget powers, expenses and revenues, the distribution and redistribution of the latter between the federal budget and the consolidated budgets of the constituent entities of the Russian Federation, based on the combination of national interests and the interests of the population living in territories of the constituent entities of the Russian Federation and their constituent municipalities.

Self-test questions

1. Describe the unity and contradictions of the functions of taxes.
2. What is the social essence of the budget?
3. What is the budget system?
4. Describe the features of the budget system of countries with different government systems.
5. The budget system of the Russian Federation - its structure and characteristic features.
6. What legislative acts regulate the Russian budget system?
7. Describe the budget classification.
8. Name the principles of the budget system of the Russian Federation and explain them.
9. Name the main types of budget deficit.
10. Justify and illustrate the allocation of costs to different budget levels.
11. What is budget balance and what are the ways to ensure it?
12. What is fiscal federalism? What are the specifics of fiscal federalism in the Russian Federation?

Literature

Legislative and guidance materials

1. Budget Code of the Russian Federation. – M.: T.D. "Elite-2000", 2005.

Main literature

1. General Theory of Finance: Textbook / Ed. L. A. Drobozina. – 1995, pp. 44 – 90.
2. Finance: Textbook / Ed. M. V. Romanovsky, O. V. Vrublevskaya, B. M. Sabanti. – 2002, p. 149 – 239.
3. Finance: Textbook - 2nd ed., revised. and additional / ed. V.V. Kovaleva.- M.: TK "Velby", Publishing House "Prospekt", 2005, p. 184 – 251.

additional literature

1. Babich A. M. State and municipal finance: Textbook for universities / A. M. Babich, L. N. Pavlova. – 2002.
2. Budget system of the Russian Federation: Textbook / Ed. O. V. Vrublevskaya, M. V. Romanovsky. – 2003.
3. Gracheva E. Yu. State financial control: Course of lectures / E. Yu. Gracheva, L. Ya. Khorina. – 2005.
4. Gritsyuk T.V. Fiscal federalism and interbudgetary relations: Scientific. ed. / T. V. Gritsyuk. – 2004.
5. Kovaleva T. M. Budget and budget policy in the Russian Federation: Textbook. allowance / T. M. Kovaleva, S. V. Barulin. – 2005.
6. New budget classification codes: Introduced on January 1, 2005. Ref. – 2005.
7. Rudy K.V. Financial, monetary and credit systems of foreign countries: Textbook. allowance / K.V. Rudy. – 2004.
8. Sabanti B. M. Theory of finance: Textbook. allowance / B. M. Sabanti. – 2000.
9. Somenkov A.D. State control in the budgetary sphere of Russia and foreign countries: Monograph / A.D. Somenkov. – 2004.

Presentations

Presentation title	annotation

The totality of state income and expenses in a strictly defined time period, drawn up in the form of a financial document with a mandatory indication of the sources and expected amounts of cash receipts, directions and volumes of their expenditure.

To form a state budget that reflects the needs of the country, subject to financing for their satisfaction from the state treasury, government bodies involved in its preparation examine and approve the expenditure and revenue parts, each of which is a mandatory structural form of the state budget. The state budget consists of the following levels:

• federal;
• regional;
• municipal;
• local;
• budgets of state extra-budgetary funds.

Budget expenditure structure

Government expenditures included in the country's budget are formed from the totality of all the needs of the state in a certain time period. Funds from the state treasury are directed to satisfy such national goals and interests as:

• Military. Ensuring the security and defense capability of the state.
• Economic. Formation of state property, repayment of external debt, support for entrepreneurship, replenishment of the state reserve, participation in investment projects, other economic expenses.
• Foreign policy. Expenses for carrying out international activities, participation in international associations, organizations, assemblies, ensuring international agreements, etc.
• Social. Providing insurance, pension, targeted and other payments, budgetary allocations for the maintenance of medical, educational, cultural and other social facilities. Expenses for the formation and functioning of the state social policy.
• Expenditures on public administration. They provide for the activities of the president of the country, government bodies and other needs of general government.

Thus, the state budget has three expenditure structures, including departmental, economic and functional. The country's main financial document also includes closed expenditure items, usually used by the Ministry of Defense, but often distributed to the socio-economic sphere.

Budget revenue structure

State revenues represent funds received irrevocably and free of charge in accordance with state legislation. The income portion is formed from:

• Tax payments, including taxes and fees on property, foreign trade, profit and other areas of activity, duties and deductions.
• Non-tax revenues are based on business income, fines, administrative fees, proceeds from sanctions and other non-tax payments.
• Income from capital transactions. Trading operations with land, government reserves, fixed capital.

Government revenues that exceed expenditures form a budget surplus, or, in fact, a surplus of funds. When the expenditure portion turns out to be greater than the revenue portion, a deficit is formed.

Principles of constructing a state budget

In the vast majority of democratic countries, the preparation of the state budget is entrusted to the government; its adoption and approval is entrusted to the highest legislative bodies.

Section 3. Macroeconomics

Topic 5. State fiscal policy in market conditions

3.5.4. State budget, its purpose and structure. Budget deficit and ways to pay it off. State debt

The state budget- one of the instruments of state regulation of the economy, the main financial plan for the formation and use of a centralized fund of state funds.

The main elements of the state budget are revenues and expenses. Revenue includes taxes and fees; expenses include financing the economy, socio-cultural programs, defense and administration.

Balance of budget revenues means the equality of its income and expenses. If expenses exceed income, then there is a deficit, and if income exceeds expenses, there is a surplus or surplus.

There are several concepts of budget deficit:

- structural deficit– this is the difference between current government expenditures and revenues that would flow to the budget under the existing tax system with full employment of the population;

- actual deficit– this is the difference between income and expenses of the actually executed budget;

- cyclical deficit– is the difference between actual and structural deficit;

- primary deficiency is the total government budget deficit reduced by the amount of payments on the government debt.

The form of manifestation of the budget deficit is public debt.

State debt– the total amount of outstanding state budget deficits accumulated during the existence of the country.

Main forms of public debt:

Domestic debt is the state's debt to its own citizens;

External debt is the debt of the state to citizens and organizations of other countries;

Ways to overcome the budget deficit:

Reducing budget expenditures;

Finding additional sources of income;

Borrowing money;

Money issue.

Public debt management is a set of government actions to repay and regulate the amount of public debt, as well as to attract new borrowed funds.

The central element of the country's financial system is the state budget. The budget serves to accumulate financial resources and use them to perform the main functions of the state. Thus, the budget is an instrument of economic and social policy and serves to redistribute part of the country's gross domestic product, taking into account public interests.

The question of defining the concept of “state budget” is debatable; in theory and practice, there are different approaches to answering it.

The budget can be understood as “a system of imperative monetary relations, in the process of which a budget fund is formed and used.”

At the same time, the budget fund is a centralized monetary fund accumulated by the state and used to finance certain public needs - ensuring national defense and security, supporting economic sectors, social protection of the population, developing education, healthcare, etc.

A different definition of the budget is enshrined in the Budget Code of the Russian Federation. It understands the budget as “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.”

Each budget definition has its own advantages and disadvantages. The definition contained in the Russian Budget Code is more functional. It reflects the tasks solved by the budget system, its multi-level structure, as well as the duality of the budget structure: on the one hand, it allocates a revenue part, which is a set of financial resources for the implementation of public policy, and, on the other hand, an expenditure part, reflecting specific areas use of budget funds.

Understanding the budget as a system of relations regarding the formation and use of the budget fund also has a number of advantages. It emphasizes the important characteristic of the budget as an element of government coercion.

Within the framework of this approach, it is also proposed to clarify the content of the concepts of “budget”, “budget plan” and “budget fund”, determining their relationship with each other.

When using the word “budget” in practice, it is understood as both a monetary fund in the hands of the state and a document defining the procedure for its formation and use. From a terminological point of view, it is more correct to separate these concepts. A document that legally establishes a breakdown of state revenues and expenses at the central, regional or local level for a certain period of time is called a budget plan. Execution of the budget plan involves the formation and expenditure of a centralized fund of financial resources, which is called the budget fund.

The budget plan is drawn up by executive authorities, reviewed and approved by legislators, after which it acquires the force of law. The Budget Law is the main financial document of the country. It is compiled for a certain period of time, called the budget period, which is usually equal to a calendar or business year. In Russia, the budget period corresponds to the calendar year (from January 1 to December 31), and in the United States it lasts from October 1 to September 30.

The budget is both a legal and an economic category. In modern conditions, it is the main instrument of state regulation of the economy and plays an active role in ensuring its stability and development. The implementation of any direction of state policy in the economic or social sphere requires appropriate resource support. That is why the budget is objectively necessary for every state to perform the functions assigned to it. Some of its elements, such as direct and indirect taxes, loans, expenditures on public administration, defense, etc., have existed throughout human history under different social systems and continue to this day.

With the help of the budget, the state redistributes the gross domestic product between industries, regions of the country, as well as between individual economic entities. The goals of such redistribution vary. These may include promoting the development of priority sectors of the economy; support for those sectors that are unprofitable or low-profit, but have high social significance (for example, agriculture), and are also necessary to ensure national security; alignment of socio-economic development of individual regions of the country; overcoming excessive differentiation of citizens’ incomes, etc.

The influence of budget regulation on the economic development of the country is complex and ambiguous. For example, the withdrawal of part of the income of citizens and organizations into the budget through the taxation system restrains the level of economic activity in the country. However, at the same time, the possibilities for carrying out state development programs financed from budgetary funds are expanding. Active equalization of regional budget incomes through financial support from the center, which helps improve the situation of poorer territories, may be assessed as unfair from the position of wealthy regions that are donors of such programs. Thus, when forming the state budget, it is necessary to develop approaches that would take into account the balance of various public interests.

The budget as a system of economic relations has two interrelated components: relations regarding the formation of a budget fund from various types of income; and regarding its use in the form of budget expenditures. The structure of budget revenues and expenditures for the next year is the main content of the budget plan; it determines the promising directions of the state’s socio-economic policy and the resources for their implementation.

Budget revenues are generated from taxes, as well as some other types of revenues called non-tax revenues (income from the sale and use of state property, from foreign economic activity, etc.). The structure of the budget revenue is not constant; it is subject to change depending on the conditions of the country's development, the specific socio-economic situation and directions of government policy. For example, tax revenues increase with the growth of economic activity in the country, and income from the sale of state property increases with privatization.

The purpose of budget expenditures is to financially support the activities of the state in the performance of its economic functions - resource allocation, redistribution and stabilization. Budget expenditures are directed, first of all, to the public sector of the economy to finance the activities of government bodies for the production of public goods (defense, law enforcement, culture and art, healthcare, education, science, etc.), as well as support for enterprises located in state ownership. Some of the expenses are also carried out outside the public sector: government funds provide benefits to low-income citizens, pay pensions and scholarships, and pay for government orders for the execution of which private firms were involved. Budget expenses, their volume and structure are subject to more frequent changes than its income.

The budget has not only a direct, but also an indirect impact on the socio-economic development of the country. Direct impact is a change in the distribution of resources in the economy that is a direct result of taxation or budget expenditures. The indirect impact lies in the fact that the forecast values ​​of the main indicators of the country's development (GDP, inflation rate, national currency exchange rate, etc.), the priorities of state financial policy, and specific directions for the formation and expenditure of budget funds formulate certain expectations in society and are taken into account other market entities when planning their economic activities for the future.

The impact of budget policy on the country's economy as a whole and its individual segments is very great; it affects the interests of various categories of the population, business entities, and government bodies. Therefore, budget planning and approval is an area of ​​competition among various interest groups. The discussion of budget laws causes a wide public outcry and attracts the attention of not only specialists, but also the media and ordinary citizens. In addition to the current priorities of fiscal policy, discussions revolve around the fundamental issue of economic theory and practice - the role and scope of government regulation. The growth in the share of GDP redistributed through the budget reflects increased regulatory influence on the economy. On the contrary, its decline is an indicator of a more liberal economic policy. The choice between these options in the long term depends on public preferences, which are revealed during the election campaign, referendum and other forms of expression of the will of citizens.

For example, with an increase in the income stratification of the population or inequality in the economic potential of regions in society, support for redistribution programs increases. Political parties that advocate expanding such programs receive additional votes.

The result of the election campaign is an increase in the number of their factions in parliament and, as a result, increased influence on the lawmaking process. Redistribution programs are included in the budget law, as a result of which the role of budget regulation in the economy increases.

A factor in budget growth is the bureaucratic organization of public administration. The bureaucracy is focused on budget growth, since its size determines its position in society and income. Therefore, it is quite natural for the bureaucracy to strive to increase the budget in every level of government control under its control.

To limit such trends, leading to ineffective spending of budget funds, special control mechanisms are introduced.

Budget is a specific detailed plan for the collection and use of resources by economic agents for a certain period.

- a document describing the income and expenses of a particular state, usually for the year (from January 1 to December 31).

Functions of the state budget:

• Regulates the cash flows of the state, strengthens ties between the center and the constituent entities of the federation
• Legally controls government actions
• Provides information about government intentions to economic participants
• Determines the parameters of economic policy and sets the framework for possible government actions

Due to the special importance of the state budget for all spheres of economic life, its preparation, approval and implementation occur at the level of laws. At the same time, the state budget itself is law.

Almost every economic institution (enterprise, firm, sector of the economy, bank, economic and financial funds, etc.) has a plan for collecting income and using expenses. All socio-political institutions (government organizations, political parties, etc.) also have budgets.

The state budget serves as a prerequisite and financial basis for the functioning of the state and the implementation by it of those functions that society has authorized it to perform. With the help of the budget, issues of financial regulation are resolved at the macro level and throughout the economy. Economic significance The budget lies in the fact that it forms a significant part of the final demand (at the expense of its funds, most of the income from the population is generated, large volumes of products are purchased, and state reserves are created). Significant financial flows pass through the budget; it directly influences the formation of important economic indicators (Fig. 1):

State budget revenues are the final stage of cash flows coming from the real sector and other major areas of financial relations, and state budget expenditures are the starting point for the movement of state resources for the needs identified by the state and society (Fig. 2).

Rice. 1. Impact of the state budget on key economic indicators:

• Volume of production
• Investments
• Real income

Rice. 2. Main directions of income and expenditure of the state budget

The state budget is the country's basic financial plan, which has the force of law.

The budget is a way of redistributing monetary income of the population, enterprises and other legal entities in the interests of financing government and other public expenses.

State budget revenues:

• Taxes on income of legal entities and individuals
• Revenues from the real sector (income tax)
• Receipt of indirect taxes and excise taxes
• Duties and non-tax charges
• Regional and local taxes

State budget expenditures:

• Industry
• Social politics
• Agriculture
• Public Administration
• International activity
• Defense
• Law enforcement
• The science
• Healthcare

Balanced Budget- a budget in which the ratio of income and expenses is equal.

If income and expenses in the budget differ, then there is a budget deficit or surplus.

State budget funds are spent in areas and in amounts determined by federal law, laws and other regulatory legal acts of government entities. State budget expenditures can be classified according to various signs, the most important of which is financing state of their functions: economic, social, defense etc.

The following expenses are financed from the federal budget:

• maintenance of government bodies;
• national defense;
• science funding;
• financing of the real sector;
• formation of state reserves;
• servicing and repayment of public debt (internal and external);
• regulation of the financial potential of state entities (federal or unitary).

Expenses financed jointly from the state budget, federal and municipal budgets include:

• state support for industries (construction, agriculture, transport, communications);
• ensuring law enforcement activities;
• ensuring fire safety;
• science and socio-cultural events.

The basic principle of delimiting expenses between budgets is their adequacy with the powers assigned to the corresponding level of government.

Budget expenditures are also divided according to the principle of their participation in the process of expanded reproduction.

Based on the principle of participation in the process of expanded reproduction, budget expenditures are divided into current And capital expenditures.

Current expenses- This:

• maintenance of government, management and law enforcement agencies;
• current expenditures on defense, science, social sphere;
• separate compensation expenses by economic sectors.

Capital expenditures are divided into:

• New construction;
• reconstruction of important state and municipal property.

Among priority state budget expenditures are divided into:

• social expenses;
• military spending;
• maintenance of the judicial system;
• education and healthcare.