The fundamental element in the process of formation and implementation of the main state plan of expenditures and revenues is considered balanced budget. A budget surplus will be the best option for the development of financial events in the economic life of the country.
Russia's desire for a balanced budget
Although the government of the Russian Federation has not been able to achieve such a phenomenon in recent years, the authorities are doing everything possible to achieve the maximum balance between the items of expenditure and the sources of their financial support. When developing a non-deficit annual plan, it should be remembered that the value of the expenditure should not exceed the revenue. This means that all funds spent on maintenance and repayment government debt (both internal and external), the social benefits of the population, the payment of wages to non-profit workers, etc., should not go against the volume of income.
How to achieve a budget surplus?
A budget surplus is usually difficult to reach. In addition, in many economically developed countries it is not always possible to eliminate a deficit when drawing up a financial calculation of a country.
Often, standard sources of cost coverage may not be enough, and then the country's leadership decides to borrow money from partner states, financial international organizations. But even if the probable deficit is artificially reduced, the federal budget surplus even in this case is unlikely to be achieved. The only right decision of the authorities will be the desire for the most balanced budget. An extremely important factor in establishing the balance of income is the professionalism of the employees of local authorities, their responsibility for financial support of their region and sustainability in the implementation of the plan and the spending of public funds.
Tax surplus taxation system
A budget surplus in Russia may result from an excess of the country's revenue component, which results in a very expected deficit reduction. However, in the event of unforeseen government spending, there is a decrease in the budget surplus, which is most often offset by an increase in tax payments. Retention of higher fiscal fees is the norm with higher profits, which, in turn, is caused by additional aggregate demand.
It follows that in the process of such calculations both for the country and for its individual administrative and territorial divisions, it is the balance of budgets that plays a huge role. Deficit, surplus - the results of the dependence of the sovereign policy in the field of fees and taxation. The presence of each of them is the main indicator of the country's economic activity. Indeed, both the expenditure side and the main profit from income taxes have a direct impact on the volume of industrial production.
Full-time budget surplus
The budget surplus, formed during the state’s economy in a state of maximum employment, is considered an ideal method of managing the country's financial policy. Having a lot of advantages over the ordinary way of accounting for deficit and surplus at all levels of economic activity, this approach contributes to the optimal assessment of the approved budget. In fact, the main distinction between the two concepts is tax.In the event of an economic downturn, production volumes will remain at approximately the same level, and the full employment surplus will continue to exceed the actual one.
In the concept of budget surplus, the authorities of the Russian Federation also lay some features. For example, the president’s position is that the state’s annual financial plan under any conditions should not feel the negative impact of changes in the value of Russian goods exported to various parts of the world.
Therefore, the federal budget must have an extraordinary design and mechanisms for the distribution of surpluses.
Where do the extra funds go?
As a rule, additional surplus funds of the federal budget are allocated in the following directions:
- replacement of domestic sources covering the deficit (this also includes profits made on the stock market of securities from the sale of state property);
- replacement of financial sources covering the state budget deficit in the external international economic arena;
- payment of public debt.
Sometimes, reserve funds received as a result of a budget surplus are held in highly liquid bonds, bills and other securities.
Ministry of Finance Activities in Surplus Issues
The bulk of management functions and control over the financial reserve is within the competence of the Ministry of Finance of the Russian Federation.
The government decree determines the procedure for the implementation by the agency of its authority, among which:
- Placement of surplus funds on international financial exchanges by creating securities of the Russian Federation and investing part of the funds in foreign bonds, stocks, bills. When choosing partners, the highest priority is given to countries with the highest ratings. stock indices.
- In the event of unfavorable dynamics of quotations of securities, their sale is possible in order to finance the federal budget deficit at the expense of the proceeds.
- Establishment of certain prices, volumes and terms of sale and purchase of government securities.
The benefits of budget surpluses for the country's economy
It is possible to avoid the likely occurrence of a budget deficit without using a financial reserve, which is often formed due to some cash balances of the previous annual plan. In this case, the budget surplus and financial reserve should be formed to create a basis conducive to the gradual repayment of public debt.
However, some experts in the field of finance believe that the desire to form surplus budgets should be abandoned. However, it is possible to argue the need for a traditional surplus with the following facts:
- If the surplus is distributed in financial reserves, then the degree of dependence of the state economy on external influences will significantly decrease. Especially relevant is the option of managing surplus in the case of maximum subordination to the market environment for prices for energy carriers. Simply accumulation will help to survive the difficult economic situation in the state in difficult periods for it.
- A budget surplus allows you to repay external debt according to a schedule that is more convenient for the country.
- The surplus development of the budget scenario is sometimes considered as a method of more loyal regulation of cash flows, supply and demand. Removing part of the financial resources from the economic system of the state, it is quite possible to wait for the appreciation of the national currency and a decrease in inflation.
It is important to note that in this way the external influence of world economic factors does not significantly affect the economic policy of the Russian Federation. Appropriate measures, as a rule, should be aimed at a significant reduction in burdensome tax levies.However, in fact, when creating a surplus, there is only an obstacle to doing business and business activity.
Budget surplus in Russia and the USA
Taking some examples from world experience, we can confidently say that without a well-developed business sector, the early development of the economy should not be expected.
A budget surplus of the Russian Federation at the moment is almost impossible due to a tough policy aimed at creating a significant difference between income and expenditure.
For example, the prevalence of a deficit in the US budget over the years has led the country's leadership to stimulate the business activity of many economic agents by providing government support for the most priority sectors.
Problems in the event of a surplus in the federal budget
The fact that the budget surplus in its current form is a tense, artificially created entity can be considered problematic. Firstly, this is due to the very unrealistic approach of the government to the main indicators in both the revenue and expenditure parts of the country's financial plan.
Secondly, at the legislative level, the institutions of reserve funds and surpluses are not displayed. The Budget Code of the Russian Federation contains only some provisions on the planned surplus and not a single word about the surplus that develops upon the fact.
