Execution of the state budget is a key component of managing the economy of modern Russia. This process contains many nuances. Will the government of the Russian Federation cope with the challenges of the market? How critical is a deficit budget and how to make it a surplus?
What is the state budget
The term "budget" comes from the English budget ("purse"). This is a set of income and expenses of the country for a specific period of time (usually a year) drawn up in the form of a special estimate. When drawing up the budget, the sources of cash receipts to the state treasury are indicated and the structure of expenses is formed. Who has these responsibilities?
The budget of Russia is made by the Government of the country and approved by the Parliament. At the end of each financial year, the highest executive authority reports on the execution of the state budget. The outcome of disbursement may vary. First, it may be in deficit (expenditures are higher than incomes). Secondly, the execution of the main state financial estimate can be in surplus (when revenues, on the contrary, exceed expenses). And thirdly, the budget can be balanced (revenue and spending are almost equal).
Income structure
The revenue side of the state budgets of most countries is based on taxes (duties, contributions), currency issuance and loans. The federal budget of Russia in 2012 had the following revenue structure. Insurance premiums brought the greatest income to the state (17.51% of revenues, or almost 4 trillion 102 billion rubles). The second largest revenue item was customs duties (17.49% or about 4 trillion 100 billion rubles). Of the classified sources of budget revenue, the third place was taken by the mineral extraction tax (10.49% of revenue, or about 2 trillion 460 billion rubles). But it should be noted that, according to government reports, 11.81% of budget revenue is "other income", they actually hold the third place in the profit structure.
All these figures reflect Russia's consolidated budget. It is divided into a federal part, regional estimates and items of expenditure related to the activities of state funds - pension, insurance and medical insurance. As such, Russia's federal budget in 2012 was formed primarily through customs duties. Insurance premiums went to state funds.
Expenditure structure
Budget expenditures of states are usually associated with the fulfillment of social obligations, national defense, investments in infrastructure (new roads, communications, etc.), as well as debt service. The budget of Russia in 2012 included the following main items of expenditure. First, these are the same social obligations (3 trillion 185.8 billion rubles). The second largest item of budget spending was the national economy (1 trillion 712.2 billion rubles). In third place is national security (797.6 billion rubles). Defense spending lagged behind quite a bit (783 billion rubles). Interestingly, Russian budget expenditures include the so-called "secret items", and in huge monetary terms - 1 trillion 841.8 billion rubles in 2012.
The budget and public debt
If the country's budget is in deficit, then one of the main sources of its replenishment are state loans. They can be internal (creditors are citizens and organizations that buy government bonds) or external, received from foreign residents. The total measure of a country's public debt includes the amount of principal and interest. Experts believe that the amount of public debt should be commensurate with key macroeconomic indicators.
Among them - the amount of debt per capita, its relation to the country's GDP and exports, as well as government spending on servicing the loan. Some economists consider the ratio of public debt to foreign exchange reserves to be important. Foreign lenders often evaluate countries' solvency based on all of these indicators.
Why the budget can be in deficit
The government for the period 2014-2016 laid the budget deficit in Russia. According to some experts, this is due to the fact that the country's economy is in a transition period, and at this stage,it does not have the capacity to respond to the challenges of the market. As a result, the government is forced to allow the budget expenditures to exceed revenues and start borrowing.
The main problem here, according to analysts, is the underdevelopment of non-primary sectors of the Russian economy, the low dynamics of innovation and job creation in areas where there are new technologies. At the same time, experts note, the task of improving the quality of social services is not set by the state. Despite the relevance of this area of budget spending.
Factors of budget surplus
Despite the fact that the budget of Russia in 2014 is planned with a deficit, the Government of the Russian Federation does not rule out that the expenditure side will still be less than the revenue. There are two main reasons for this - the favorable exchange rate of the ruble against the leading world currencies (the income that the Russian budget has in dollars is increasing in ruble terms), as well as rather high oil prices. Among the additional factors, experts name comfortable prices for export products of Russian manufacturers. Thanks to good market conditions, the budget can be adjusted in the fall. But, as analysts note, possible changes may also relate to the likelihood of a transition to borrowing - as in a situation with a deficit. So far, the Russian government has included a deficit of 0.5% of GDP in the annual budget of Russia. Interestingly, the International Monetary Fund is optimistic: according to foreign economists, the Russian budget will be executed with a surplus of 0.3% ofGDP.
As the Russian budget is approved
The annual budget of Russia is formed in several stages. First, the Government works with him, making calculations for income and expenditure items, substantiating the formulations and analyzing the economic situation. A complete structure of the Russian budget is being drawn up. Then the draft is submitted to the State Duma for consideration. At the next stage, the Duma deputies send the document to the Committee dealing with budget, tax, banking and financial policy.
There, documents provided by the Government are studied by officials, expert economists, financiers, and scientists. Then the project is shown to the President of Russia, sent to other committees of the State Duma, and, finally, gets to the Accounts Chamber, which makes a conclusion. This procedure includes checking the budget project for the legality, validity of the revenue and expenditure parts. After that, the State Duma starts the process of adopting the budget in four readings. If this stage is successful, then the approved document is submitted to the Federation Council. If the budget is adopted there, then the draft will be signed by the President of Russia.
Dynamics of Russian budget expenditures
Revenue and especially expenditure items of the budget of the Russian Federation are not constant values. The values of the former may fluctuate due to market conditions, the quality of work of fiscal authorities and financial institutions. The second is to be adjusted from year to year by the Government itself, depending on the goals that it considers to be priorities. A striking example is the cost of the item"National economy". If in 2009 their value was about 1 trillion 63 billion rubles, then in 2010 the figure increased by 303 billion, and a year later it increased by another 336.
An example of an item of budget expenditures, the dynamics of which is ambiguous, is “national defense”. In 2009, the state spent about 712 billion rubles on financing this area, a year later - significantly less, 678. But in 2011, there was a sharp increase in cash flows for defense - 793 billion rubles from the state budget. In 2012, the figure dropped again to 783. At the same time, the total amount of the federal budget of Russia from 2009 to 2012 has been steadily growing.
Execution of the Russian budget
After all legislative procedures have been completed, the State Budget of Russia begins to be executed. The main tasks here, according to analysts, are to ensure the timely receipt of taxes and control the quality of the transfer of funds to recipients. The Government of the Russian Federation is responsible for revenues and expenditures of the Russian budget at the federal level. The executive authorities of the regions are responsible for the development of funds in the subjects. Local administrations of municipalities monitor the implementation of the instructions of the main financial document of the country in cities, districts and regions.
It happens that the budget of Russia in the year of crisis or recession in the global economy may be sequestered. Most often this is due to the deterioration of the energy market. The specifics of this industry is such that it is difficult to predict fuel prices, as experts say. Budget sequestration is usually associated with the reduction of expenditure items in equal proportion (but there may be so-called "protected" areas of financing).
Russia's budget policy for the coming years
In June 2013, in one of his Addresses, the President of our country outlined new vectors in the state budget policy. First, the head of state noted that the situation in the economy of Russia and the world creates new challenges. Secondly, Vladimir Putin made it clear that the economic development model of the Russian Federation, based on high oil prices, has exhausted the resources for further dynamic growth (as it was, for example, in 2000-2008). Export volumes are growing slowly, the trade balance remained practically unchanged in 2012, and in relation to GDP it even decreased.
Vladimir Putin outlined the period of planned restructuring of the budget policy - 2014-2016. He set the task of developing options for attracting alternative sources of income if the deficit increases in an unpredictable way. The head of state also noted that it is necessary to amend the laws that will allow establishing the procedure for developing long-term, strategic forecasts for the development of the Russian economy and building budget policy.
