Problems of budgetary federalism in the Russian Federation

This article analyzes the dysfunctions of fiscal federalism in the Russian Federation. Fiscal federalism is understood as a system of distributing powers, revenues, and expenditures between levels of government to ensure financial autonomy and interregional equalization. The federal budget forms the framework for interbudgetary relations, around which equalization channels and incentive mechanisms are built. The regulatory framework is represented by an extensive array of acts regulating the delineation of powers, the composition of revenues and expenditures, transfer rules, transparency requirements, and budgetary discipline. The article presents the principles of fiscal federalism. However, despite the developed legal framework and enshrined principles, practice demonstrates a gap between the legal model and the actual functioning of fiscal federalism. Excessive centralization of financial flows, limited autonomy of regions and municipalities, high dependence on transfers, and a narrow local revenue base are observed. Statistical data on the share of subsidies in consolidated budget revenues, the concentration of key taxes at the federal level, and tax coverage ratios confirm the vertical imbalance. Critical areas are related to the discrepancy between delegated expenditure authority and the assigned funding sources. Based on the findings, promising areas for addressing the identified shortcomings were developed.