For the normal existence and implementation of various practical tasks, the state needs money. The budget of the country is formed by revenues received by the treasury. Part of the money is spent on various purposes. As a result, the state of the treasury changes regularly. There is a budget deficit and surplus. Financing is carefully regulated by legislation. Every year, plans are made for the rational use of funds. This article will focus on the budget structure — the budget deficit and surplus, as well as on the state loan and its functions.
Definition
Each year, the authorities allocate an amount of money and make a list of planned activities. In addition, there are constant values that are always taken into account. The budget has three different states - balance, deficit and budget surplus. It is necessary to analyze in detail these concepts:
- Balance - the ideal state of finance, when the level of expenditures of the country is equal to (no higher and lower) incomes. Allows you to easily repay all existing debt obligations without affecting other items.
- Budget deficit - when expenses are much higher than incoming revenues. There is a lack of funds.
- Budget surplus - income received exceeds all expenses. Instead of a lack, an excess of funds appears.
Financial analysts try to achieve balance by applying special techniques for this.
Budget formulas
What do financial conditions look like when presented in the form of simple formulas?
Balanced:
Income - Expense = 0 (zero balance).
Deficiency:
Income - Expense = - (Minus balance, lack of money).
Surplus:
Income - Expense = + (Left over funds).
Important! When calculating public funds, the most favorable is zero balance. This means that the forecasts came true and all plans were successfully completed. The concepts of budget deficit and budget surplus clearly reflect the financial condition of the state.
Lack of funds
Financial analysts are able to predict in advance what the state of the country's economy will be and find solutions to problems. Lack of funds is a complex problem that is caused by costs.
Consumption - a necessary waste, giving which you can get in return certain benefits. They are huge for the state, so economists every year try to think through financial policies, take into account all the features of the market. It is impossible to avoid spending, but to reduce them or overestimate the importance - yes.
Costs are divided into the following groups:
- military (maintenance of the army, special equipment, salaries of military personnel);
- economic (work of factories, large state factories, etc.);
- social (salaries of public servants, pensions, provision of orphans and single mothers, payments to persons with disabilities, social assistance provided to those in need);
- foreign policy (foreign projects, investment);
- managerial;
- emergency (unforeseen expenses - force majeure situations, disasters).
In countries where the economy is developed, expenses are formed much faster than income is accumulated.
It's important to know! The budget deficit and surplus depends on the timely receipt of mandatory taxes paid by citizens, as well as the completeness of the amounts.
Sources of financing
The authorities can compensate for the lack of money in various ways. First of all, they look for additional sources of profit:
- issue into further circulation of money supply (launch of inflation);
- issue of special bonds of the state loan - the formation of domestic debt;
- a request for financing sent to other states - to take external debt;
- reduce available costs as much as possible.
Economists determine in an analytical way the importance of all planned spending for the year, trying to reduce them if there is not enough money.
Sources of financing:
- Domestic - bank loans, government loans, budget loans - are taken from funds from other levels.
- External - foreign loans, assistance of foreign investors.
It also compensates for deficit sources of financing.
Cost reduction measures
Techniques used by economists to prevent the financial crisis:
- reorganization of the existing tax system to increase its overall efficiency;
- debt restructuring;
- enhanced control over available costs;
- spending reduction - reduction of subsidies given to unprofitable industries;
- streamlining the system related to social benefits.
Some financiers consider the deficit, on the contrary, a blessing. It helps to overestimate the economic condition of the country and activate to quickly solve problems.
Deficit limits
According to the legislation, the maximum threshold for the deficit arising in the budget is determined - fifteen percent of the previously approved annual amount of all Russian income, excluding non-repayable investments.
The maximum allowable level of deficit, for which the state must take certain measures, is ten percent. This is provided for in Article 130 of the Budget Code of the Russian Federation.
Interesting! Loans provided by the National Bank, the acquisition by the bank of various securities of the Russian Federation are not considered sources capable of covering budget expenses.
Sources of financing, list of expenses - everything is approved by law. So the state is trying to control the state of deficit and surplus in order to achieve balance.
Budget surplus
Rarely occurs. When for several years the country is experiencing a lack of funds, the authorities try to find opportunities to solve the problem. Revenues and expenses are interconnected. To reduce long-term debt, you need to cover it with excess.
Primary surplus - a specific concept, which means that the amount of income received in the treasury, not including borrowed funds, must exceed the available costs. Then the excess funds are used to effectively repay the main public debt, reducing the country's financial obligations. This helps to improve the economy.
The formula looks like this:
DB - K> RB - OGD
Decoding:
- DB - the value of budget revenues;
- K - loans;
- RB - expenses;
- OGD - the amount of interest payments, respectively, the repayment of the bulk of the debts.
Advantage or disadvantage
Pragmatic financiers do not consider surplus good. For the effective development of the economy, you must regularly spend money. Invest them in various projects, helping them to develop, and in return make a profit. When a large surplus occurs, it means that a lot of money settled inside the savings funds, as if a person had piled up the accumulated funds in a bank or buried them.
The other side is reserve formation. Kudrin, as Minister of Finance, created several special reserve funds, the money of which can be used in a crisis.
Interesting! Deficit and surplus of funds - not extremes, if the size is small. The ideal state of the budget economists consider a small deficit. When there are debts, but it is not difficult to cover them. Balance is an exceptional phenomenon, because the current market is extremely changeable.
Causes of Surplus
The Russian Federation is a country that actively exports its own raw materials. Half of the annual income is made up of money paid by foreign customers buying oil and other exported goods.
Economists plan income, expenses, surplus and deficit, focusing on the current value of black gold. The government looks at the amount of sales of raw materials, estimates the future price. If export volumes remain, and the price rises, an excess will appear in Russia.
A balanced budget are countries that receive a different income. However, the functions of the budget deficit and surplus are identical for them. Both concepts determine the scale, pace of development, and also the direction of the state economy.
The structure of income and expenses
They annually form a deficit or surplus of the economy.
| Income | Costs | |
| Tax (taxes) | Non-tax | General |
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State loan
A country, like individual citizens or organizations, can borrow or give someone money. The state may be:
- By the borrower - this agreement is drawn up, which indicates the parties and the amount of the borrowed funds.
- Lender - transferring loans to countries, ordinary citizens or companies. There is a special program of soft loans aimed at supporting legal entities - small entrepreneurs or sectors of the economy that do not have sufficient investment attractiveness.
- Investor - buy stocks or invest in various projects.
- Guarantor - bearing responsibility for the fulfillment of financial obligations undertaken by individuals (organizations). If the borrower failed to repay the debt, the state does this on its own.
The country repays its debts by spending the budget. The concept of deficit and surplus reflects the state of economic affairs and determines the course of financial policy to solve problems.
State loan functions
State loan has the functions of:
- Creation of funds - there is a attraction of money from loan capital to centralized national funds. The principles of urgency, full repayment and payment are used. Investors attracted by the state voluntarily transfer funds under guarantees of a timely return. The main instrument will be securities.
- The use of funds is the impact of the budget deficit and surplus on the country's economy. Surpluses replenish reserves, and deficiencies are covered by them. Attracted funds must be returned. In addition to official revenues, the state uses an effective refinancing mechanism, when borrowed funds are spent on repayment of old debts.
- Control - affects the liquidity of all commercial banks, solvent demand and economic development.
It is noteworthy that a private investor, company or a foreign state can become a country's creditor. Standard business relations are being formed, the only difference is the amount of money borrowed by the state, disproportionately more than the expenses of ordinary people.
