Analyzing the Current and Capital Financing from Local Budgets

Abstract

Budgetary financing plays an important role in the system of distribution of financial resources among economic entities. The article is aimed at analyzing the current and capital financing from local budgets in the today’s environment, as well as identifying the main causes of underfinancing of budgetary institutions and measures to overcome them. The essence and status of budgetary financing from local budgets are considered. Budgetary financing has been proved to be an extremely complex phenomenon, which is a leading link of the State’s financial system. The basic principles, forms and methods on which the budgetary financing system is based, are defined. The sources of financing for budgetary institutions are systematized and classified as to fulfilling basic tasks to ensure public welfare. The structure of budgetary financing is characterized according to economic classification. The dynamics of current and capital financing from local budgets according to economic classification and during 2016-2018 are analyzed, which allows to assess the efficiency of the use of financial resources by local authorities. It is defined that the proportion of current financing is slightly higher than capital financing at the level of local budgets. The main problems of financing from local budgets, as well as measures to overcome them, are highlighted. An efficient financing will be achieved only if the revenue part of the budget is adequately filled and the legislative framework is stable, as well as if appropriate control over the expenditure of budget funds is provided. The need to improve the efficiency of the use of budget funds is substantiated and the main ways of optimizing them are proposed.

Keywords

• budget
• financing of budgetary institutions
• local budgets
• current financing
• capital financing
• deficit