The concept of finance and the financial system of the Russian Federation: definition, structure and features

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:55

Modern society cannot exist and develop without the continuous reproduction of food, clothing, real estate, social life. As you know, the process consists of four stages, including the creation of a product, its distribution, exchange and, of course, consumption. These 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 economy. 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 areais the process of creating, distributing and further using funds of accumulated funds. The key goal in this case is the implementation of state tasks and functions that may relate to the entire economy of the country as a whole or its specific subject in particular.

The concept of the financial system and its composition

The modern structure of financial institutions, relationships and funds, which provide a full-fledged process of mobilization and application of monetary resources, constitutes the public monetary system. During the USSR period, the following subsystems were distinguished in it:

• nationwide;
• sectors of the economy and individual enterprises.

Often, a state loan also served as a separate element. The description of the financial system of the Russian Federation during the Soviet period suggests that it was relatively simple, but at the same time 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 led to the allocation of other links in the system of monetary relations. It should be noted that, in general, the system under consideration consists of three enlarged subsystems:

• insurance;
• public finance;
• funds of economic entities, i.e. enterprises.

It is advisable to consider them in more detail.

Finance of the Russian Federation: concept, types, functions

The enlarged subsystems named in the previous section are classified into more private ones independing on the specific methods and forms of creating monetary funds. So, public finances include:

• government loan;
• budget system;
• off-budget funds.

Insurance includes:

• protection of tort interests (liability);
• private;
• property.

The modern concept of the financial system of the Russian Federation suggests that the funds of economic entities include money:

• non-profit organizations;
• commercial organizations and enterprises;
• budgets of intermediaries, including 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 worth noting that the process of creating and further regulating a public structure relating to monetary relations is implemented by authorized entities on behalf of the state. When building a modern financial hierarchy, the following principles were taken into account without fail:

1. Competent combination of sectoral and territorial concepts.
2. Ensuring the required level of financial self-sufficiency of financial structures of a regional scale, while maintaining the centralized control of the system in general terms.
3. Absolutely clear division of the management process according to areascash flows.

All of the above principles can be traced not only at the legislative level, but also in practice.

Public Finance

In the process of studying the concept 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 function 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 goals.

In accordance with the economic nature of public finance, it is necessary to understand monetary relations, the subjects of which (departmental bodies, organizations, enterprises, individuals) are informed about the creation of budgets and their transfer to federal disposal. Then the collected funds are applied to the 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.

Problems 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 the problems relevant to this topic. Today, the key sore points in the field of both federal and municipal money are:

1. There is an urgent need to improve the tax system.
2. Lack of balance between budgets of different levels, as well as fundsoff-budget funds, which are considered state funds.
3. Significant increase in the efficiency of the use of both federal and municipal property.
4. Improve fiscal federalism.
5. Ensuring the full unity of the financial and monetary policy of the state.
6. Strengthening cash control.

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 expenditure. Government revenues are primarily represented by that component of monetary relations, which concerns the creation of financial resources.

The main source of state income is the national income. However, in case of emergency, such as natural disasters or wars, this is the national we alth accumulated earlier.

Sources of state revenues are internal and external. The first group should include national we alth and income. In the second - the income of another country (less often - we alth). The composition of state revenues is formed through the issue 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 administrativeincome. The specificity of spending is in the full provision of state needs and, of course, in the implementation of the previously mentioned functions (social, military, administrative, economic, political, and so on).

Today, there is a classification of expenses of the administrative apparatus into direct and expenses of institutions, enterprises and other structures of the federal type of ownership. Their main goals are the following points:

• production expansion;
• formation of social plan funds;
• meeting the needs of the state and its individual subjects.

The concept and functions of the budget

After we have defined the concept, the 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 tool for ensuring its own activities, as well as for the implementation of Russia's socio-economic policy.

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 to financially solve problems and perform the functions of not only the state, but also local government.

Budget mechanism

In order for budgetary functions to be performed in the best way, the state uses an appropriate mechanism. This is a complex of forms of organization of monetary relations, as well as methods of mobilization and applicationmeans of national importance. The mechanism under consideration includes the following components:

1. Administrative authorities.
2. The budget system of the Russian Federation.
3. The bases of the legal type, which are presented, as a rule, in the form of decrees and laws of higher management structures.
4. Document and reporting systems, as well as other details that are needed for certain activities regarding the execution of both the revenue and expenditure parts of the budget.

The use of this mechanism to regulate the country's economy is implemented through the maneuvering of funds that come at the disposal of the state.

Fiscal policy

And finally, let's move on to the final, final aspect of studying the concept of finance and the financial system of the Russian Federation. Under the budget policy of the Russian Federation, it is necessary to understand a number of measures in the field of organizing monetary-accumulative relations in order to provide the country with funds to perform the functions discussed above.

The concept under consideration, one way or another, involves clarifying the tasks and goals in the field of state finance, creating a mechanism for mobilizing money to the treasury, managing it, choosing the directions for using the collected funds, managing the budget and tax systems, as well as organizing the full regulation of social and economic processes through fiscal instruments. This is precisely the socio-economic meaning of the state budgetpoliticians. Among its main, initial tasks are the following items:

• Concentration of finances to address issues of priority.
• Reducing the tax burden on the state economy.
• Putting in order the obligations of the Russian Federation.
• Formation of an extremely effective system of intergovernmental relations and financial management of the country.

Fiscal policy is nothing but the core of government economic policy. It reflects absolutely all monetary relations of the administrative apparatus of the country with public structures and individuals. The quality characteristics of the federal budget, certain parameters that are laid down in it, largely determine the degree of social protection of citizens living in Russia, and the ability of the nation in terms of investment in some projects, and the level, strength of influence of the Russian Federation as a separate subject on international arena, and even the activity of residents in relation to entrepreneurship and business development.