The federal budget is ... The law on the federal budget

Any social payments, reconstruction of non-profit institutions and many other activities of national importance are compensated to a greater extent by national wealth. Its formation and structuring is a complex and time-consuming process, and in it we will try to understand this article.

The concept of the federal budget

The federal budget is the fundamental treasury of any state, which is a system of relationships based on imperative funds that are an integral part of government funds. National financial wealth in the base of its formation takes the main socio-economic functions of the country, from which the main directions of future incomes and expenditures are allocated.

In turn, the federal budget of the Russian Federation fulfills the most important functions in the life support of the state system:

• Stimulates social policy;
• Regulates economic processes within the country;
• Participates in the redistribution of GDP and national income;
• Controls the flow of funds.

As we see, this financial instrument has more than enough tasks, so the government is well suited to its formation and structuring, which we will talk about further.

How is the budget adopted?

We all understand that the federal budget is not just a money supply, it is a huge integrated mechanism, and each of us is interested in what principles the officials are guided by when it is adopted.

As a rule, the treasury is approved in four hearings and includes the following series of procedures:

1. According to the statistical data of key industries, the final indicators for the previous reporting period are estimated.
2. Next, the nearest perspective of the socio-economic development of the state is predicted.
3. The main points of the forthcoming tax and budget policy are outlined.
4. Based on the plans for the development of key areas, the consolidated budget and the consolidated financial balance are projected.
5. Next, federal programs for various purposes - targeted, investment and defense programs - are projected.
6. Agreements of an international character with any financial obligations are taken into account.
7. Accounts of the federal budget for other expenses are taken into account.
8. An upcoming program aimed at implementing external loans is being considered.
9. The proposals on the level of minimum indexation of social payments are considered.
10. Suspended regulatory legal acts, the financing of which is not provided for by the budget policy for the next year.

Mandatory programs

The draft federal budget as a financial instrument also carries a certain social responsibility to its people, so some mandatory programs still have a place, but each of them is carefully checked for compliance. For this purpose, there is an approved legislative clear-cut algorithm of actions:

• The government is provided with a feasibility study for the consideration from a technical and economic point of view, since the state apparatus should be sure of the need to finance a procedure from the treasury;
• Further, the social and environmental consequences of implementing a specific program are predicted;
• Guided by current legislation, the government decides on the direct amount of funding for a particular project;
• Other necessary documentation is prepared.

Principles of the formation of the federal budget

Any details related to the formation and disposal of the state treasury are regulated by this normative legal act - the Federal Law on the Federal Budget. A clear prescribed algorithm of actions in the event of a particular situation is extremely important in today's unstable market relations. Since it would be strange and very unreasonable after the adoption of the treasury structure for the current year to dispose of funds for social payments in favor of strengthening state defense.

Therefore, every, even insignificant, disposition of public funds is regulated by the current legislation and is based on the following principles:

• All receipts of financial flows are classified into groups and classes depending on the economic and territorial predisposition - this means that some incomes of local budgets remain at the disposal of the district, and vice versa;
• If there is a deficit due to excessive costs, the missing funds are covered, also based on the structural component of this financial instrument.

In general, it is difficult to describe the mechanism for managing the state treasury in several proposals, but then we will try to deal with this complex structure.

Structure of the federal budget

We all understand that only a higher executive authority is unable to manage a huge complex of cash flows. The federal budget is an immeasurable financial institution, and in the world practice there are several generally accepted structures for its regulation:

• Banking;
• Mixed;
• Treasury.

Once in the Russian Federation, a banking structure was practiced that made it possible to record the flow of financial flows at the payment level and was regulated by the Central Bank. But such a system turned out to be imperfect because of the untimely display of information, so it was decided to switch to treasury management.

Manage your budget

In addition to the principles of disposition, the federal law on the federal budget also regulates all levels of management of this property.

So, at the first stage is the Main Administration of the Federal Treasury, which deals with balancing all current incomes and expenses, as well as informing the executive authorities about this.

At the second level is the Treasury Department, directly subordinate to the district authorities. The functions of this institution are to inform the higher authorities of income and the execution of expenditure orders on its territory.

The third stage of management includes local city and district treasuries, which account for the movement of public funds in the allotted area.

Functions of the Central Treasury

All means of the federal budget in one way or another are registered by the employees of the Central Treasury, which is entrusted with a number of important functions and tasks:

• Distribution of the revenue side of the budget between the various levels of government;
• Accounting for any kind of payments, including tax, on national accounts;
• The implementation of refunds and netting off of excessively or erroneously transferred funds between treasuries of all levels;
• Recalculation of planned indicators taking into account various kinds of deferrals and benefits;
• Establishment of restrictions in this or that financing;
• Constant monitoring of expenditures for the effective disposal of the state treasury;
• Management of all financial flows in the bank accounts of the treasury.

Sources of income

Who forms the state treasury? Let's get acquainted with the participants of this complex and continuous process:

1. Taxpayers - carry out regular and systematic transfers, supplement the incomes of local budgets.
2. The central bank, in conjunction with commercial banks, organizes the direct movement of public funds in the accounts.
3. The Federal Treasury, with its structural divisions, carries out the accounting of the received finance.
4. The executive bodies, including the state inspection, are intermediaries between payers of obligations and the treasury, regulate their mutual relations.

Thus, it can be said that the most important and irreplaceable participants in this mechanism are business entities that have certain obligations to the country. But there are also non-tax budget revenues, which can include fines, penalties and other penalties that have arisen in the course of relations with government bodies.

Sources of expenditure

Expenditure federal budget - this is the result of computational formations, which fully depend on the revenue side. The size of this sector of the state treasury is directly proportional to the social and economic needs of both the population and the country as a whole. Of course, this does not mean that they are completely satisfied, nevertheless are taken into account in annual planning. They are distributed according to the following principles:

• Branch (is formed on the needs of various departments and ministries);
• Territorial (the area of participation of the subjects of the country, that is, the population);
• Functional (costs are conducted in accordance with the declared targeted programs, among which may be affected by social, environmental, scientific and other issues).

Any decisions on public spending are taken directly by the Central Treasury and the Ministry of Finance.

Balance of the budget

The federal budget of the Russian Federation for the last decades could not boast of its balance, which, in principle, is normal in the world practice - always something that exceeds: either incomes or expenses.

So, in the 90s of the last century, the budget deficit was persistently observed, which means that there was much more need for social and economic regulation of the state than for taxpayers.

However, in recent years the situation has changed to the exact opposite, and at the moment there is a steady surplus of the national treasury.

Regulation of the federal budget

Now the government has established the most important task - increasing economic efficiency against the backdrop of foreign policy, which means that the structure of state financial reserves is primarily regulated. Various kinds of principles for the management of social funds are regulated by the Federal Law on the federal budget.

But we all understand that it is difficult to foresee anything in such unstable market relations, which largely depend on international relations. Therefore, against the backdrop of recent events, a special Stabilization Fund was created, aimed at supporting economic growth through budget surplus.