MECHANISM OF BUDGET FUNDS SPENDING IN THE CONTEXT OF SOCIO-ECONOMIC DEVELOPMENT OF THE STATE

Abstract

The paper deals with the theoretical and practical principles of functioning of the mechanism of public budget funds spending. A scientific approach to interpreting the meanings of the terms: “budget funds spending” and “mechanism of budget funds spending” was proposed. Methods, forms, tools and instruments of the mechanism of budget funds spending were determined. Due to the assessment of relationship between the public and local budget expenditures and gross domestic product, attention is paid to the key aspects of the role of the mechanism of budget funds spending in the regulation of social and economic processes. The dynamics, structure and composition of the public and local budget expenditures were analyzed in accordance with the activities and functions of the state. It was substantiated that optimal combination of all components of the mechanism of budget funds spending enables the state to execute efficiently its functions, ensuring the development of the National economy, accessibility and quality of public services to the population, and allows it to solve the main social problems, etc. The main problems of budget funds management were highlighted. This allowed to determine the ways of improving the state fiscal policy: – eliminating conflicts between fiscal policy priorities – simultaneous stimulation of investments and innovations into the budget and increase in the public budget expenditures on the execution of social function with the simultaneous decrease in expenditures on economic activity; – while determining the amount of budget expenditures on the execution of social function it is necessary to take into account the budget expenditure share, which is covered by its revenues, and when there is a need for deficit financing – to allocate the raised funds for the execution of the economic function; – restructuring of public budget in order to increase the expenditures on investment and operational activities with the simultaneous decrease in expenditures on financial activity; – increasing efficiency of the accumulated budget funds spending, elimination of corruption component in their spending, reducing the tax burden, stimulating demand for goods and services of domestic production, improving the investment climate, etc.