Analysis of Domestic Experience in the Application of Measures and Instruments of Budgetary Policy to Stimulate Economic Growth

Abstract

One of the most important goals of the state is to increase the country’s economic growth rate, including achieving high economic growth indicators such as the level of inflation and unemployment. The current situation in the Russian Federation requires a comprehensive approach from the authorities: within the country to increase the level of welfare of citizens, outside its borders-to preserve and increase competitiveness. This paper presents a retrospective analysis of economic growth rates from 1992 to 2019. Having studied the Russian experience of applying measures and tools of budget policy, the authors identified the most effective tax and budget tools. Best practices have shown the most significant effectiveness in such tax instruments as moderately progressive taxation of personal income, reducing the basic tax rate for indirect taxes, and expanding the practice of applying the simplified tax system. Among the budgetary instruments, the following have shown high efficiency: an increase in expenditures of the budget system budgets for basic and applied scientific research, an increase in budget investments in the industry that contribute to subsequent multiplicative growth, and an increase in expenditures of the budget system budgets for vocational training, retraining and advanced training of the working population.

Keywords

• economic growth
• tax instruments
• budget instruments
• gdp
• inflation
• unemployment
• budget expenditures
• tax rates