Ideally, in the state budget, the amount of planned revenues that will come in the billing period should correspond to those expenses that the country's treasury will incur. But this basic financial plan, according to which the country lives, is not always implemented. In some cases, authorities have to spend more than originally planned.
Instruction manual
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. The costs include ensuring state security, maintaining the police, army and administrative apparatus. In addition, part of the funds is allocated for the maintenance and functioning of the public sector of the economy and financial support for small and medium-sized businesses.
2
The state’s concern is also the financing of science, education, healthcare, part of the funds is also spent on the payment of allowances, scholarships and pensions, and environmental protection. The state also has unforeseen expenses that arise in the event of major disasters of anthropogenic and natural character. In addition, the state also has external obligations. These include government procurement of goods and services, taken into account in calculating GDP; transfers that are not taken into account when calculating GDP; as well as servicing the country's external debt.
3
But the state, as a financial institution, has its own sources of income. These primarily include tax revenues that are paid to the state budget by both individuals and legal entities. Social insurance contributions are paid to the country's budget, which are paid by all enterprises. In addition, the revenue part of the budget takes into account the profit that comes from enterprises in the public sector of the economy, as well as income from money emissions and privatization of state enterprises.
4
Depending on the ratio of expenses and incomes, there are three state budget conditions. When income and expenses are equal, the budget is considered balanced. If revenues exceed expenditures, there is a budget surplus, when expenditures are greater than revenues, they speak of a budget deficit.
5
The main reason for the budget deficit is a sharp decline in revenues in relation to the planned amount. The reason for this may be the economic crisis, inefficient tax policy, and increased spending on social needs. The decrease in budget revenues may be the result of structural adjustment of the economy, farce of major circumstances: wars, disasters, etc. Any unplanned and unconfirmed financial expenses can also provoke a budget deficit.
6
If the gap between expenses and income is temporary, the deficit is considered random. The deficit is called valid if it is significantly ahead of the growth of expenses relative to income. This value is planned and its value is laid down in the budget for the new financial year. Its actual value often exceeds planned. Reduce the deficit by sequestration - reducing planned costs.
