The economic slowdown affected the region's consolidated budget

In March this year, during a speech at the scientific-practical conference on fiscal federalism, Regional Development Minister Igor Slyunyaev noted that the overall negative macroeconomic situation affected the condition of the consolidated budget of the Russian Federation regions. As the Minister spoke, in this case the reduction in 2013 revenues from corporate income tax causes major anxiety; so according the results of 2013 the reduction was 13% compared with the same period in 2012.

Among the negative trends of recent years has also been a 12,1% reduction in the share of capital investments in the total expenditure of the consolidated regional budgets by the end of 2013. The Minister noted that this trend is dangerous because it leads to deceleration of processes of modernization and renovation of engineering infrastructure, capital stocks and the social sphere.

Also to the results of 2013 the size of the total consolidated debt Federation subjects to the budget increased by 26.9% and as of January 1 of the current year amounted to 2 trillion 26 billion rubles. Most of the borrowed money goes to cover the budget deficit, which is growing every year. However, the debt of municipalities is also growing. Today the duty of local authorities is 288.9 billion rubles.

In matters of solving the existing problems of the RF subjects specific role is for measures aimed at maintaining the sustainability of budgets of the subjects of Russia and increasing the efficiency of public expenditures, as well as improving mechanisms for intergovernmental transfers.

To this day, the main financial mechanism aimed at smoothing the economic disparities remain subsidies. According to statements of Igor Slyunyayev, the total volume of such grants in the current year amounted to 439 billion rubles. However, the level of security of funds between the subjects of the federation is still significant, as even equality of the total income and expenditure of budgets of different levels in the budget system of the Russian Federation; they have significant differences, due to heterogeneity in the economic development of the regions, population and natural climatic conditions. Thus according to the experts the difference between the richest and poorest ten subjects is more than 40 times.

Also Ministry for Regional Development has been working to improve approaches to the provision of inter-budget subsidies. In this matter there are three main areas. First, the reduction in the number of grants by their consolidations, which leads to increased regional autonomy in the choice of priority areas of co-financing and reduction of administrative procedures necessary to obtain subsidies. According to the Minister of Regional Development, the amount of subsidies in 2014 will be reduced to 80.

Secondly, increasing the share of subsidies distributed by application to the federal law on the federal budget, which leads to greater efficiency and rational use of subsidies.

Third, the improvement of the rules for granting subsidies. Ministry for Regional Development has prepared a draft regulation which clarifies the formation, administration and distribution of subsidies from the federal budget to the budget of the Russian Federation subjects.

Summing up his speech, Igor Slyunyaev noted that effective development is possible only through effective fiscal policy at the regional level. Local authorities should pay more attention to the quality of budget management, mobilization of tax revenues and reduce wasteful expenditure.