Ideally, in the state budget, the amount of planned revenues that will come during the billing period should correspond to the expenses that the country's treasury will incur. But this basic financial plan, according to which the country lives, is not always fulfilled. In some cases, the authorities have to spend more than originally planned.
Instructions
Step 1
The state has numerous financial obligations in relation to those structures that ensure its functioning, as well as those that are traditionally subsidized or socially significant. Expenditures include ensuring state security, maintaining the police, army and administrative apparatus. In addition, part of the funds is directed to the provision and functioning of the state sector of the economy and financial support for small and medium-sized businesses.
Step 2
The state is also concerned with financing science, education, health care; part of the funds are also spent on the payment of benefits, scholarships and pensions, and environmental protection. The state also has unforeseen expenses that arise in the event of major man-made and natural disasters. In addition, the state also has external obligations. These include government procurement of goods and services taken into account when calculating GDP; transfers that are not taken into account when calculating GDP; as well as servicing the country's external debt.
Step 3
But the state, as a financial institution, also has its own sources of income. These primarily include tax revenues that are paid to the state budget by both individuals and legal entities. The country's budget also receives social insurance contributions, which are paid by all enterprises. In addition, the revenue side of the budget takes into account the profit that comes from enterprises in the state sector of the economy, as well as income from the emission of money and the privatization of state enterprises.
Step 4
Depending on the ratio of expenditures and revenues, there are three states of the state budget. When income and expenses are equal, the budget is considered balanced. If revenues exceed expenditures, a budget surplus arises, when expenditures are greater than revenues, they speak of a budget deficit.
Step 5
The main reason for the budget deficit is a sharp decline in income in relation to the planned amount. The reason for this may be the economic crisis, ineffective tax policy, and increased spending on social needs. A decrease in the revenue side of the budget may be the result of structural restructuring of the economy, farce major circumstances: wars, catastrophes, etc. Any unplanned and unconfirmed financial expenditures can also provoke a budget deficit.
Step 6
If the gap between expenses and income is temporary, the deficit is considered random. A deficit is called a valid deficit when the growth of expenditures is much faster than income. This value is planned and its value is laid down in the budget for the new financial year. Its actual value often exceeds the planned one. Reduce the deficit by sequestering - reducing planned costs.
