"Reforming the Mechanism for Inter-Budgetary Subsidies"

<p>The work is devoted to the interesting and important topic is the reform of intergovernmental fiscal relations in Russia. Currently, the issues of reforming the interbudgetary relations are in the focus of the reform of the budget system. This evidence taken with a high frequency of programs and concepts designed for medium and long term. This study also considers the questions of theoretical bases of intergovernmental fiscal relations in terms of fiscal federalism; international experience in the provision of intergovernmental grants, as well as an analysis was conducted of the current mechanism of granting of budgetary subsidies in the Russian Federation.<br /><br />In this work, were raised and statistically proven chronic problem for the budget system of Russia: the allocation of large amounts of transfers at the end of the financial year, the attempt to use the funds before the end of the financial year, the inefficient allocation of budgetary subsidies for the support of some branches of economy.<br /><br />Thus, to solve the above problems, the author attempted to justify the need to reduce some of inter-budget subsidies (mainly in cases of agricultural support), and their radical consolidation, which will increase the financial autonomy of the subjects of the Russian Federation.<br /><br />The study indicated on the desirability of distribution of consolidated subsidies by a single formula on a per capita basis and subject to budgetary sufficiency of the subject of the Russian Federation, as a high economic differentiation of Russian regions. Uniform formula on a per capita basis will help to stimulate competition among the subjects of the Federation for human resources.<br /><br />The obtained results allow concluding that the consolidation of inter-budgetary subsidies and uniform distribution formula with a focus on the long term is the right direction for further reform of the budget system of Russia.<br /><br />In the end, the author has formulated five principles that should be built in the system of granting of interbudgetary transfers that will have a significant impact on the further development of budget federalism in the Russian Federation.</p>