Any state cannot fulfill its main function (regulation of the economy) without the use of appropriate economic methods. At the same time, it cannot earn money and carry out entrepreneurial activities to realize this function. That is why the necessary financial resources form the state budget, the revenue of which is replenished, mainly due to taxation.
Budgeting is carried out once every twelve months, often during this year unforeseen circumstances arise that have a significant impact on its implementation and implementation by the state of its stabilization policy.
In order to better understand the meaning of this concept, you need to find out for yourself what a budget is.
This is, firstly, a plan of expenditures available for the maintenance of health care, education, defense and other activities that are in the hands of the state.
Secondly, the income plan, formed by the tax system, as well as other non-tax payments and fees. At the same time, the revenue should be clearly stipulated in the budget, i.e. in what volumes tax payments should be received in the context of basic taxes.
Thirdly, in accordance with the planned budget, the state carries out certain loans during the year, and is also obliged to pay interest on already existing debts.
A mandatory procedure in the budget process is the provision of a report on budget execution. This document is very important, since it should contain all items of state expenditures for the past year.
In other words, we can designate what a budget is - a kind of balance between revenues and expenditures of the state, the balance of which can be either positive (surplus) or negative (deficit).
The state budget has a huge impact on the economy of any state, and at the same time it is very sensitive to any changes (economic or political) both within the country and in the external environment. We can see the interdependence of the budget and the domestic economy of the state on the example of additional state subsidies to innovative industries, which in the future will increase productivity and increase the budget revenues. Or, conversely, an increase in tax rates entails a reduction in household incomes, and, accordingly, a decrease in consumption. With additional investments in the state’s production sectors (metallurgy, coal industry, etc.), people increase their wages, reduce unemployment and achieve a positive economic result - an increase in tax revenues and a reduction in the budget deficit.
When considering the concept of “what is a budget”, one cannot fail to mention the important function of the state, which is to redistribute financial resources. It is the state budget that is the main source for maintaining an unprotected category of the population (disabled people, veterans, low-income citizens). Additional benefits are paid to these people, certain subsidies are given out, and other financial support is provided.
What is a budget? This is felt by those sectors of the economy that are recorded in the relevant legislative document as priority ones, and it is in the expenditure side of the state budget that the amount of investments necessary for their maintenance and development is recorded. Indeed, for the successful development of the state, the constant development of high-tech industries, characterized by energy and resource-saving factors, is necessary.
