The state budget is an important detail of the functioning of any country. What is a budget? This is primarily a plan of expenses and income for a certain period of time. Each state budget must comply with all the requirements laid down in the legislative framework of the country.
History of state budgets
The first similarities of documents for planning expenses and incomes appeared with the emergence of state entities. Initially, the personal treasury of the head of state completely coincided with the sovereign. All income derived from fees passed into the ownership of the ruler and distributed at his discretion. Only in the last few centuries, budget execution has been allocated to state authorities, as the tax system has been built. The state began to receive income from the following sources: tax deductions, profit from state property.
Also, expenses were systematized, and some semblance of articles appeared: the maintenance of the court, military expenditures for the protection of the state and new conquests, administrative expenses. Budget execution did not always correspond to approximate forecasts and could change depending on many factors: unforeseen war, expansion or reduction of territories, and so on.
Budget process
What is a budget process? This is the development and implementation of fiscal policy entrusted to executive and representative authorities.
There is a budget process system:
- forecasting future budget indicators of both expenditure and revenue;
- formation of parts of the budget;
- negotiation and approval of a budget project;
- execution of approved indicators in the reporting period;
- control over how the budget of the Russian Federation is implemented;
- analysis of budget related statistics.
Forecasting and Budgeting
Prediction of future budget indicators is based on several points:
- statistical indicators of budgets of previous periods;
- expert assessment of future GDP growth in the country;
- assessment of external factors affecting revenue and expenditure.
The main state body responsible for the formation of the draft budget is the Ministry of Finance. Drafting the main financial document of the country begins in January of the previous year. First of all, the ministry’s structures are preparing the possible conditions under which the country will operate in the budget period. Based on these data, approved by the government, the Ministry of Finance generates budget items: expenditure and revenue. The following is a list of funds for specific articles of the classification and the division of funds between managers. The legislator sets aside on completion of these actions the deadline until July 15 of the year that precedes the adopted budget period. The Cabinet of Ministers and other executive bodies have a month to study the submitted draft, as well as to make adjustments and amendments.
Stages of consideration
The budget of the Russian Federation goes through several stages of consideration before being adopted by the State Duma:
- Submission to the State Duma of the Russian Federation.
- Forwarding a budget bill to the appropriate committee of the Duma. The Committee on Taxes, Budget, Finances, and Banks reviews and discusses materials with the involvement of leading specialists in the public sector.
- The preliminary financial budget is sent to the President, as well as to the Accounts Chamber of the Russian Federation and the committees of the State Duma. As a result, the budget receives the opinion of the Accounts Chamber. What is a budget conclusion? This is the conclusion that all the data contained in the document comply with the laws of the Russian Federation, as well as are justified and supported by the necessary explanations.
- Presentation of the project for four readings in the hall of the State Duma.
First reading
The first reading involves a discussion of the general points of the future budget. The general idea and its compliance with the forecast for the development of the country in the next fiscal year, trends in tax and budget policies, the principles of the distribution of funds between the federal budget and regional, a program of work with external state lenders are discussed.
Deputies determine:
- Budget revenues for specific classification items, subgroups and groups.
- Revenues between different levels of budgets from federal taxes
- The predicted deficit, as well as possible ways to cover it. The deficit is indicated in percent, and cannot exceed the legislatively approved rate
- Gross expenditure for the reporting period.
After accepting all these changes, it becomes clear what the budget is in a "raw" form.
Second reading
The second reading takes place within 15 days from the adoption of the law in the first reading. Within this period, expenses are approved according to the classifiers and within the framework approved at the first reading. The level of support for the constituent entities of the Russian Federation is considered.
Third review
For the third reading, the Law “On the State Budget of the Russian Federation” takes 25 days from the moment of the second adoption. This procedure fixes expenses in accordance with subsections of the federal budget, and also determines the beneficiaries who will spend these funds.
Fourth reading
The legislature adopts final amendments and quarterly divides revenue and expense parts.
Budget and Federation Council
The budget signed and adopted in the State Duma is submitted to the Federation Council for consideration, and then it is transferred to the President, who, in the absence of comments, signs it. What is the budget adopted? It looks in the form of a law approved by the State Duma and the Federation Council, as well as with the acceptance of the President.
Budget execution
Replenishment and spending of public funds according to the approved main financial document is called execution. The only body in Russia responsible for budget execution is the Federal Treasury. All financial budget flows are distributed through the accounts of this department.
Budget process control
The Government of the Russian Federation cannot independently amend the articles of the federal budget. All changes can be carried out through the State Duma in the framework of the adoption of new legislative acts.
Control over financial flows is vested in the budget committee of the Duma, as well as executive bodies. On the part of the Federal Assembly, supervision is carried out by the Accounts Chamber, which has the right to inspect departments, ministries, and enterprises related to state financing.
