Assessment of the influence of functioning of small business on the economy of a municipal entity

After the adoption of Federal Law of October 06, 2003 No. 131-FZ “On the general principles of organization of local self-government in the Russian Federation” the situation in the economy of municipalities, especially in rural municipalities and small towns, has become more complicated because the expansion of managerial functions was accompanied by reduction in tax receipts to local budgets. Many municipalities have been unable to carry out efficiently the responsibilities and tasks imposed on them, due to the lack of a developed economic base. As a result, municipali ties vary greatly by the level of socio-economic development and revenues of local budgets. According to many experts, small business is an effective tool for the development of economic base of municipal entities. At all levels of government there exists the need to support this economic sector; relevant normative-legal acts are adopted and policy documents aimed at its development are worked out. However, on the basis of the results of the surveys among small businesses it has been identified that local authorities in many municipalities are not interested in providing necessary assistance to the development of this sector of the economy. The analysis of scientific literature devoted to the study of small business shows that at present the role of small business in the economy of the municipality has not been studied thoroughly. In this regard, a correlation and regression analysis was conducted between the indicators of functioning of small business and own revenues of the budgets of municipalities for the purpose of clarifying their relationship. Statistical materials of the Vologda Oblast for 2009-2014 served as the information base of the presented research. In the course of the assessment the author identified basic essential characteristics of small businesses that have the greatest impact on the level of own incomes of the budgets of municipalities. As a result, taking into consideration the problems of businesses, several measures to increase the level of development of small business were worked out for local governments. Their implementation will help intensify the activity of the economic sector under consideration and increase the economic independence of territorial formations of the regions. The material presented in the paper can be used to evaluate the effectiveness of activities aimed to support small business in the region and to determine future strategies for the development of this sector of the economy for regional and municipal authorities and management.