No state in the world can exist normally without a state budget. What is this document, and what are the functions of the budget? The state budget refers to the list (balance sheet, estimate) of all cash costs and income of the country. Its role in the development of national economies has always been very ambiguous. By changing tax levels and spending, governments often regulate aggregate demand. For this reason, two types of fiscal policy are distinguished : restrictive (restrictive) and expansive (broad). The first means a reduction in government spending and an increase in taxes, which leads to a weakening of inflation and the normalization of the economic situation. The second involves an increase in spending and a decrease in the level of taxation, thereby helping to overcome complex economic crises.
The revenue part of the budget is formed from such revenues as income tax, taxes on enterprises and companies, social insurance contributions, indirect taxes, taxes on commodities, excise taxes. The expenditure side of the budget satisfies the state's need for financial resources.
The functions of the budget are different, but one of the most important is the growth of aggregate demand through public procurement of services and goods. He acts as the main instrument of state policy. The economic essence of the budget lies in the fact that the state uses it as the main tool for conducting social, economic policies and fully ensuring its functioning. With the help of the budget, a large-scale redistribution of all incomes is achieved to achieve the greatest social justice. Almost half of the budget goes to the socio-economic needs of the state.
These costs are divided into two groups:
- social - includes expenses for the payment of pensions, benefits, education, healthcare costs;
- economic - includes the costs of housing, regional development, energy, utilities, environmental protection, manufacturing and mining, transport, natural resources, agriculture, communications.
The normal state of the state budget is the equality between its revenue and expenditure. During the economic crisis, the budget, as a rule, has a negative balance, thereby there is a deficit of income. During periods of speculative boom, the state budget may have a surplus. In this case, a surplus is formed, that is, an excess of income over budget expenditures. During crises, aggregate demand decreases and inflation increases during a speculative boom. The state budget deficit can be covered by issuing money, additional income, increasing external or internal debt.
The essence of the state budget is most clearly manifested in its functions. Since he is considered the main element of the entire financial system of the state, he performs the following budget functions:
1. Distribution - concentrates funds through certain channels and redistributes them through the treasury.
2. The control, which is manifested in the implementation of control measures for the entire process of formation and distribution of funds. It is carried out by the Treasury, the Central Bank, all tax authorities.
3. Redistribution of GDP.
4. Stimulation and regulation of the economy.
5. Financial support of the public sector (government bodies).
6. Carrying out social policy.
Additional budget features:
- information function;
- institutionalization of public preferences;
- regulatory.
The state budget is considered a legal act, which is the country's most important financial plan.