Passive behavior of the government. Budget problems are aggravating in the regions

Despite a number of reforms, the current multi-level budgetary system does not fully correspond to the development strategy of the country and its regions. Still the Russian Government has not taken effective measures to address the main structural contradiction of the budgetary system, based on the non-adequate distribution of revenue and expenditure responsibilities, manifested in the sharp decline in the revenue base of territorial budgets during the 2009 global financial crisis. However, the crisis effects have not been analyzed and the conclusions have not been made. The Ministry of Finance of the Russian Federation tried to solve the problem of territorial budgets imbalance not by enhancing existing mechanisms of revenue distribution at the regional level, but by granting large-scale loans to be repaid after 2012. Despite it, due to the sharp rise in the social burden1, the deficit and the debt load enlarged and resulted in the budget crisis in the regions. The experts of the Higher School of Economics state that 20 RF subjects, having the level of public debt above 80%, had been actually in default2 by the end of 2014...