Home – Home – Jornals – Region: Economics and Sociology 2022 number 1

The budgetary policy is among the main tools for managing local development. Its effective implementation contributes to budget replenishment, allowing regions to increase expenditures on social and economic measures. This study aims to analyze the most important directions that state policy takes to fund the activities of local self-governments in large cities and to study the impact of budgetary policy on the development of urban areas with at least one million inhabitants. The paper considers the primary fiscal indicators for the largest cities of the Russian Federation; assesses the structure of budget revenues to identify, on the one hand, how sufficient tax and non-tax revenues accumulated in cities and credited to their budgets are and, on the other hand, how dependent city budgets are on grants from the budgets of their respective regions; and carries out a detailed analysis of urban budget expenditures. Since the city of Novosibirsk is the largest municipal entity in Russia, this article takes a close look at its budget specifically. By calculating fiscal coefficients, we study the city’s budget stability and reveal its stance both among the other largest cities of the federation and urban districts of Novosibirsk Oblast. We analyze in greater detail crucial revenue items for Russian cities with a population of over one million, both accounting for their own tax and non-tax revenues and considering gratuitous transfers to urban budgets from regional ones. The article concludes that it is necessary to secure stable income tax sources to local budgets in general (and to cities in particular) to enhance their tax potential. We have noticed that between 2011 and 2018, urban areas with over a million inhabitants had the significantly poorer fiscal capacity and were less self-sufficient in terms of their revenues. Moreover, we have examined the main expenditure items for the largest Russian cities to determine whether they correspond to the socio-economic development goals of cities with over one million inhabitants. In Russia, such cities must be separated from the total population of municipalities as they act as the country’s growth drivers and have a decisive impact on its economy. Large cities need tax sources of income sufficient for their stable functioning and the formation of development budgets secured legislatively and at the federal level.