Modern society cannot exist and develop without the continuous reproduction of food, clothing, real estate, the social sphere of life. As you know, the process consists of four stages, among which the creation of a product, its distribution, exchange and, of course, consumption. The named stages, one way or another, are mediated by monetary resources. In this article we will consider the concept, essence, composition, content of the financial system of the Russian Federation.
The concept and role of finance
Money today is the key concept of commodity farming. They are becoming an increasingly important category of the economic system as a whole and, accordingly, the main element of the existence of the Russian Federation. It is worth adding that the term "monetary economy" is similar to the concept of "finance".
In the process of considering the concept of finance and the financial system of the Russian Federation, it is important to note that money is one of the fundamental components of commodity-production relations. Their subject area is the process of creation, distribution and further use of funds of accumulated funds. The key goal in this case is the implementation of state tasks and functions that may apply to the entire economy of the country as a whole or to its specific subject in particular.
The concept of the financial system and its composition
The modern structure of financial institutions, relations and funds, which provide a full-fledged process of mobilization and application of monetary resources, makes up the public monetary system. During the USSR period, the following subsystems were distinguished in it:
- nationwide;
- industries and individual enterprises.
Often, a separate element was government credit. The description of the financial system of the Russian Federation during the USSR suggests that it was relatively simple, but at the same time it was fully consistent with the state policy that was carried out in the country. The implementation of market reforms in the Russian Federation, the implementation of a completely new economic policy objectively determined the allocation of other parts of the monetary system. It is worth noting that, in general, the considered system consists of three enlarged subsystems:
- insurance;
- public finance;
- funds of economic entities, that is, enterprises.
It is advisable to consider them in more detail.
Finances of the Russian Federation: concept, types, functions
The enlarged subsystems mentioned in the previous section are classified into more private ones, depending on specific methods and forms of creating funds. So, public finances include:
- state loan;
- budget system;
- extrabudgetary funds.
The insurance includes:
- protection of tort interests (responsibility);
- personal;
- property.
The modern concept of the financial system of the Russian Federation suggests that the funds of economic entities include money in their composition:
- non-profit organizations;
- commercial organizations and enterprises;
- budgets of intermediaries, among which are private pension funds, credit structures, insurance companies and other financial institutions.
Organization and regulation of the financial system
Having fully considered the concept and composition of the financial system of the Russian Federation, it is advisable to note that the process of creating and further regulating the social structure related to monetary relations is carried out by authorized entities on behalf of the state. When building a modern financial hierarchy, the following principles were mandatory taken into account:
- Competent combination of industry and territorial concepts.
- Ensuring the necessary level of monetary independence of financial institutions of a regional scale, while maintaining centralized control of the system in general terms.
- Absolutely clear separation of the management process in accordance with the areas of cash flow.
All the principles listed above can be traced not only at the legislative level, but also in practice.
Public finance
In the process of studying the concepts of finance and the financial system of the Russian Federation, we found out that state budgets are the most important aspect of monetary relations that operate at the highest level of the country. These issues are primarily related to the redistribution of the country's total income for the implementation of political, social and economic tasks.
In accordance with the economic essence, public finances must be understood as monetary relations, whose subjects (departmental bodies, organizations, enterprises, individuals) are informed about the creation of budgets and their transfer to federal disposal. Then the collected funds are used for costs associated with the expansion of production, the needs of management and defense. Public finance is a tool to meet the needs of society and the administrative apparatus.
Challenges in Public Finance
Having studied the concept of the financial system of the Russian Federation and one of its components - public finance - it is worth moving on to problems that are relevant to this topic. Today, the key sore points in the field of both federal and municipal money are:
- The urgent need to improve the tax system.
- Lack of balanced budgets at various levels, as well as funds from extrabudgetary funds that are considered state.
- Significant increase in the effectiveness of the application of both federal and municipal property.
- Improving fiscal federalism.
- Ensuring the full unity of the financial and monetary policy of the state.
- Strengthening control over cash.
Government revenue
We examined the concept of finance and the financial system of the Russian Federation, which includes the state budget. Therefore, it is advisable to pay special attention to departmental income and expenses. Government revenues are primarily represented by the component of monetary relations that relates to the creation of financial resources.
The main source of state revenue generation is national income. However, in case of emergency, including natural disasters or wars, such is the national wealth accumulated earlier.
Sources of state revenue are internal and external. The first group should include national wealth and income. In the second - the income of another country (less often - wealth). The composition of state revenues is formed through the issuance of money, taxes and loans.
Government spending
When studying the concept and structure of the financial system of the Russian Federation, it is important to pay attention not only to state revenues, but also to departmental expenses. This concept is interpreted as part of monetary relations due to the use of administrative income. The specificity of expenses is in the full provision of state needs and, of course, in the implementation of the previously mentioned functions (social, military, managerial, economic, political and so on).
To date, there is a classification of administrative apparatus expenses as direct and expenses of institutions, enterprises and other structures of the federal type of ownership. Their main goals are the following points:
- expansion of production;
- the formation of social plan funds;
- satisfaction of the needs of the state and its individual entities.
The concept and functions of the budget
After we have defined the concept and content of the financial system of the Russian Federation, we should touch on the topic of the budget and its components. The appearance of this category is associated with the idea and the subsequent formation of the state, which uses it as a key means to ensure its own activities, as well as to implement the socio-economic policy of Russia.
In accordance with the current Budget Code of the Russian Federation, the budget should be understood as a form of education and further spending of money, which are intended for the financial solution of tasks and the performance of functions not only of the state, but also of local self-government.
Budget mechanism
In order for budget functions to be performed in the best way, the state uses the appropriate mechanism. This is a complex of forms of organization of monetary relations, as well as methods of mobilization and use of funds of national importance. The mechanism under consideration includes the following components:
- Administrative authorities.
- The budget system of the Russian Federation.
- Legal grounds, which are presented, as a rule, in the form of decrees and laws of higher governance structures.
- Document and reporting systems, as well as other details that are needed for a certain activity regarding the execution of both the revenue and expenditure parts of the budget.
The use of this mechanism in order to regulate the country's economy is realized through maneuvering with the money that comes at the disposal of the state.
