The budget system of the country implies a set of measures for the accumulation, distribution and use of funds aimed at implementing the most important social programs, ensuring the management apparatus, as well as improving the welfare of citizens.
The main financial document of the country is the state budget, which is approved by the government for the current year. If we consider the Russian Federation, then in it the budget system includes three main components:
- Federal (republican) budget.
- The budget of the Federation.
- Local.
The republican budget concentrates all the funds coming from various sources and going to support the most important areas of management, meeting social needs, maintaining the country's military capabilities, and maintaining the state administrative apparatus. In addition, part of the funds is allocated to budgets of lower levels as necessary.
According to the structural criterion, two main parts are distinguished: revenue and expenditure. The first is formed at the expense of mandatory payments and includes various sources. The expenditure part reflects the mechanism for the distribution of accumulated funds in accordance with a previously approved plan. When forecasting the budget for the coming period, it is necessary to adhere to a stable balance of opposing articles. In practice, achieving an equilibrium position is extremely difficult and often impossible.
In connection with the current state of the economy, the budget is in short supply, that is, the inflow of funds is much less than its outflow. The government sets a limit for the deficit, the excess of which can lead to negative consequences. Then a measure of impact such as sequestration is applied. It involves reducing government spending in all areas of its activities. Only certain articles protected by applicable law are subject to exclusion.
It is worth noting the following principles of the budget system:
- The principle of unity implies the presence of one legal basis for all economic entities, which involves a certain procedure for spending funds, unified principles for financing various sectors of the economy, unified forms of settlements not only with counterparties, but also with state bodies.
- The budget system of the country should be arranged in such a way that each authorized body clearly knows its rights and obligations. This is especially true for the formation and distribution of budget funds at all levels. That is, the lower levels also have the right to manage the expenditure part at their own discretion, if the decision is not contrary to the norms of the law.
- The principle of independence means that all budgets have the right to form their own sources of income, determine the needs and sizes of payments necessary for the implementation of the most important social programs.
- The principle of completeness of reflection of the movement of financial resources implies careful maintenance of documentation with the introduction of the required details, which allows to fully assess the scale of receipt of funds from each available source and the scope of their expenditure. Thus, regulatory authorities are able to track the appropriateness and honesty of the distribution of financial resources at each level.
In addition, the budget system must comply with the principles of transparency, reliability, efficiency and balance. Thus, decisions made at any level should be open to any interested user, and for this, financial plans for the next reporting period are regularly printed and published in specialized publications.
And in conclusion, we can say that the budget system is a rather complex set of various organizations whose goal is to improve the well-being of citizens, as well as the country's reputation in the international arena.