Economic activity of the state The economic activity

Economic activity of the state The economic activity of the state as a whole is shown in the following functions: 1) definition of legal base promoting a normal course of economic development; 2) restriction of monopolistic activity and protection of competition; 3) redistribution of incomes and riches 4) stabilization of economy; 5) redistribution of resources.

Redistribution of economic resources are caused by imperfection of market system in two situations: 1) deviations of equilibrium volume of manufacture of some goods from their optimum volume; 2) refusal of the market of allocation of resources or their unsufficient allocation for manufacture of public goods, boons and services.

Public goods, boon and services The variants of direct participation of the state in manufacture and accordingly, financing of branches making, ensuring the certain goods, boon and services are also possible. They are called public or social. Basic difference of the public goods from usual market is that they are indivisible and are not subject to action of a principle of exception.

• The device and contents of objects of an accomplishment in cities and occupied items concerns to most typical to the public goods: street illumination, gardening, sidewalks etc. convenience; in wider aspect – service in protection of public order, protection of state against external encroachments, service of state management.

State should accept the decision of manufacture and maintenance of a community of certain volume of such goods, boons and services through the mechanism of public finances. The redistribution of economic resources is reached by means of taxbudget system: through the tax and other obligatory payments, the private sector limits manufacture of individual, market goods and population – in their consumption. Thus part of resources is passed in the state budget, and the necessary needs, branches, manufactures ensuring satisfaction of public needs are financed.

Concept of public finances The public finances as a part of a financial system connected with action in the industrial and social relations of public sector covering diverse interrelation in economy and socium. The economic essence of public finances is that, they express the money relations connected with creation, distribution and redistribution of cost of a public product and a part of national riches formation of financial resources of the state, its enterprises and use of the received means on performance of functions of the state and state enterprises.

Functions of public finance The action of the distributive concept is acceptable to public finances in the greater degree, therefore they carry out distributive and control functions However for more complete characteristic of public finances in distributive function it is necessary to allocate its subfunctions: 1) accommodation; 2) redistributive; 3) stabilization.

In content of public finances is allocated the state budget, off-budget funds, state credit, finance of state enterprises and organizations. On a level of state management of economic and social sphere the public finances are subdivided into: nation-wide (republican, federal, governmental) and local (municipal). The functioning of public sector is based on presence of a state ownership

Public revenues are understood as system of economic relations, during which the set of means acting in the property of the state for creation of material base of its functioning is formed. Source of the public revenues is the income of a state ownership

To the revenues of a state ownership concern: 1) revenues of state enterprises and organizations as the total income (profit), tax to added cost, excises, customs incomes; 2) revenues of state property (from state inhabited fund, ground, woods, water resources, other natural resources, means from denationalization (in Russian – razgosudarstvlenie) and privatization of a state ownership); 3) revenues of paid services rendered by state establishments and organizations (admission fees etc) and payment for non economic services ( registration fee, tax of car inspection-road fee, the declaring tax on trade marks); 4) special means of budget establishments including rent payment for premises, incomes of the subsidiary enterprises etc.

The classification of the public revenues Depending on organizational-legal registration of patterns of ownership public revenues consist of: 1) incomes of state enterprises and organizations; 2) tax receipts of business sector; 3) tax receipts of public, cooperative and collective organizations; 4) tax payments of population; Depending on spheres of creation the public revenues are classified: 1) on the revenues formed in sphere of material manufacture; 2) the revenues formed in nonproductive sphere. On financial content public revenues are divided into: 1) tax; 2) non tax (means from razgosudarstvlenie and privatization, incomes of money-ware lotteries etc. ) On methods of mobilization the incomes are classified to: centralized and decentralized.

State expenditures are the money costs connected with functioning of the state. As an economic category state expenditures express economic relations connected with distribution, redistribution and consumption of a part of a total public product in the purposes of development and perfection of public manufacture, satisfaction of various needs of a society.

State expenditures are the money costs connected with functioning of the state. As an economic category state expenditures express economic relations connected with distribution, redistribution and consumption of a part of a total public product in the purposes of development and perfection of public manufacture, satisfaction of various needs of a society.

Content of state expenditures The content of the state expenditures consists of expenditures of the state budget, state off budget funds, state enterprises and organizations, establishments of industrial and non-material spheres. The structure of the expenditures of enterprises of public sector consists of : 1) expenses connected with industrial, economicoperational activity; 2) on the extended reproduction (basic and circulating capitals); 3) payments in the budget and off-budgets funds; 4) in incentive and stimulating goals.

Principles of organization of the state expenditures planned character The special purpose character of financing The irrevocable character of financing The financing in a measure of performance of the plans (forecasts) • an economy mode • the optimum combination of budget, credit and own sources of their covering • •

Classification of state expenditures 1. On relation to process of material manufacture and creation of national income. 1) expenditures directly connected with material manufacture and concerning to industrial sphere; 2) expenditures in non-material sphere of activity; 3) expenditures on creation of state reserves. 2. To a subject attribut: the expenditures on economy, welfare measures, science, defence, management

3. To a territorial attribute: on economic regions 4. On a branch attribute: in sphere of material manufacture are divided into expenses in an industry, construction, agriculture, transport and communication, trade, supply and preparations; in nonproductive sphere subdivi -ded into expenses for education, science, public health services and physical culture, social insurance and social maintenance, on a defence and management

There are two methods of financing of the state expenditures: 1. Financing the self-supporting enterprises and organizations 2. Budget financing 3. Emission financing Forms of budget financing: the grants, subventions, subsidies, transfering financing