Under the budget understand the scheme of income and expenses of an entity (state, organization, family, person) for a certain period of time. As a period of time, most often take a year. This term is actively used in economics. The main directions of budget policy and tax policy coincide with their goals and objectives.
State budget
The state budget is the country's most important financial document. It includes a set of estimates of various state services, departments, implemented and planned programs, etc. The source of the state budget is the federal treasury.
Government work aimed at the formation, approval and implementation of budget programs in Russia is called the budget process.
The budget of Russia
The budget of Russia consists of the following levels:
- Federal budget.
- Regional budgets of the constituent entities of the Russian Federation.
- Municipal (local) budgets of municipalities.
The body in charge of the execution of the Russian budget is the Federal Treasury.
A budget may be surplus or scarce. In the first case, his total income is more significant than expenses, and in the second, on the contrary.
Budget Approval
At the initial stage, the Russian budget is developed by the Ministry of Finance. This phase is called budget planning. Further work on the bill is the Government of Russia. Then it is considered by the State Duma, and the process takes place in 3 stages, which are called readings. The next body to consider the proposed budget is the Federation Council. At the last stage, it is signed by the president.
The adopted budget is designed for the coming year and the next 2 years of the planning period. The beginning of the year is considered to be the first of January, but in some states it starts from a different date.
If a budget is not accepted by any of the authorities, a situation arises that is called a budget crisis.
What is budget policy?
The fiscal policy of states is part of the financial policy. Its main goal is to ensure a balance of income and expenses and to designate a source of financing the budget. It is one of the levers that the government can use to mitigate a particular financial and economic crisis.
Financial policy and budget policy (as one of its directions) serve the purpose of developing and strengthening the state economy. In turn, financial policy is one of the most important areas of the country's economic policy. Fiscal policy is closely linked to the choice of economic model, in accordance with which the state intends to exist and develop.
Budget policy is a system of measures and actions that are taken by authorities to manage the budget process, which is part of the overall economic policy. It is focused on the implementation of various budget functions to achieve the planned social and economic effect.
From the budget you can get a lot of information about the main directions of the budget and tax policy for the year, as well as for the next 2 planning years.
Budget policy has subjects and objects. Subjects are authorities, in one way or another, associated with the development and adoption, execution and control of budget execution. Objects are certain articles of legislation and other legal regulations.
Principles of fiscal policy
The budget policy is implemented on the basis of the following principles:
- the principle of objectivity, when objective economic processes are taken as a basis;
- the principle of rigor, mandatory budget execution;
- the principle of continuity - the construction of such a budget policy that would take into account the existing experience gained in previous periods;
- the principle of publicity, which implies transparency and openness when performing all stages of the budget process.
The main types of budget policy
Budget policy varies depending on the goals set. The following varieties of it are distinguished:
- long-term (strategic), with a implementation duration of 3 or more years, and tactical;
- according to priorities, budget policy is divided into: revenue type, expenditure, control and regulatory and combined.
- in terms of focus, budget policy is divided into restraining and stimulating;
- according to the territorial principle distinguish local, regional and federal policies;
- by the nature of specialization distinguish investment, tax, social policy and other types.
The main directions of budget policy
The directions of budget policy coincide with its goals and objectives. The main directions of the budget policy of the Russian Federation:
- Ensuring the full functioning of the tax system.
- Optimization of revenues from the export of goods and raw materials.
- Work on the effective management of state. property.
- Improving the efficiency of budget spending.
- Improving the efficiency of planning and budget execution.
- Striving for a sustainable budget surplus.
- Increasing transparency of budgetary procedures.
- Streamlining budget procedures.
- Decreased dependence on the situation in world markets.
- Ensuring sustainable economic growth and improving the standard of living of the population.
Thus, the budget and the main directions of budget policy are interconnected.
Budget Policy Opportunities
Important in the implementation of budget policy is the magnitude of the so-called budget potential. It characterizes the possibility of accumulating cash in the budget. The possibilities for state regulation of the economy and the implementation of other state functions depend on it. With the development of the financial and economic crisis, this potential decreases. This is largely due to poor tax collection.
Fiscal policy is seen as the core in the economic policy of the state. With the right budget policy and a sound budget, investment opportunities and the quality of life of the population increase; the influence of the state on the world stage is growing, labor productivity is growing.
The level of its predictability is also important. The federal budget must be stable and predictable in order to be a reliable guarantor of stability in the country. In Russia, it is customary to draw up a budget message from the president, which is an obligatory component in preparing the federal budget.
As tools for implementing the main directions of fiscal policy are taxes, expenditures, government loans, government procurement and transfers.
The main disadvantage of the Russian economy
When implementing budget policy, it is advisable to draw up a long-term forecast, which is called the budget forecast. However, the country's dependence on fluctuations in world energy markets makes making such a forecast quite problematic. Now the country is in a state of systemic economic and social crisis, even despite the recovery in prices for exported raw materials. However, the impetus for its development was just a sharp drop in oil prices in 2014-2016.
Current socio-economic crisis
The economic crisis is understood as a violation of stability and stability in the country. At the same time, the old ties in the economy and production are violated, which creates a general imbalance in economic processes. Previous crises were noted in the 90s and in 2008-2009. However, the latter did not cause serious social problems, probably due to the short duration of the reduction in raw material prices. The collapse of the Soviet Union was probably also the result of falling oil prices.
Additional causes of the current crisis could be the following:
- The introduction of a package of sanctions starting in 2014 against the Russian Federation on the part of Western states;
- deterioration of the situation in Ukraine and the accession of Crimea to Russia.
However, the initial reason for the development of the current crisis was probably the deviation of the state’s economic policy from the course favorable to the country. So, until 2010, the budget of the country was characterized by a surplus, but after 2010 the surplus disappeared, despite the favorable then external economic background. At the same time, the country's GDP growth stopped.
Experts' forecasts for ending the crisis in early 2017 and improving the economic and social situation in the country have not yet been confirmed. Economists are calling for a change in the economic course, otherwise it is not known what could be the consequences for the country's economy and budget in the event of a new collapse in oil prices.
Ways to Get Out of the Crisis
To get out of this situation, a budgetary policy mechanism can also be applied. It is necessary to create incentives and favorable conditions for the introduction and development of new technologies, overcoming technological backwardness, increasing energy efficiency and labor productivity, developing high-tech industries and reducing domestic oil consumption in order to increase its exports. The fight against an unfair and uneven distribution of income is a prerequisite for economic recovery. Indeed, without this, it is impossible to increase domestic demand for domestic products and improve the social situation of the population. Unfortunately, these pressing problems for Russia are still not being resolved, which creates gloomy prospects for the Russian economy and the country's budget. This negative process can be accelerated by the rapid depletion of oil reserves in Russia and the increase in the cost of its production, projected for the 2020s and partially observed now.
