Russian Prime Minister Dmitry Medvedev speaking in the State Duma with the report on the
work of the Russian Government claimed that regional budget shortage has been eliminated and the
number of regions with public debt exceeding revenues has been reduced [4]. This discussion makes the
problem of proper assessment of sub-federal budgets relevant. Their deficit administration and
accumulation of debts have become a steady trend in recent years. The past year has been marked by
increased revenues and spending cuts, but even under these conditions most regions were unable to
implement balanced budget policy: 54 constituent entities of the Russian Federation were running deficits
with debts exceeding half their own revenues, which caused the weakening of investment and consumer
demand. The situation is exacerbated by the decline in energy prices, destabilization of the Federal budget
and a general decline in business activity in the country. The federal policy is also tightening: since 2014,
there has been a steady decrease in financial support for territories, which forces regional authorities
to address the issues of financing through local sources of revenues. Palliative measures taken by the
Government of the Russian Federation provide only short-term alleviation of the situation but do not
solve long-term problems. This, in particular, is evidenced by the growth trend of regions’ market debt
load renewed in 2016, despite attempts of Ministry of Finance to replace a significant part of market loans
with budget loans. This article is a continuation of a series of publications started in 2010 in the ISEDT
RAS journal reflecting the results of administration of sub-federal budgets. The purpose for the present
study is to identify the peculiarities of the budget process in 2016. Its scientific novelty is determined by a
comprehensive analysis which helps assess the condition of territorial budgets by all key parameters and
develop specific proposals on measures to eliminate negative systemic factors. The results of this analysis
contrast with the results summarized by the Chairman of the Russian Government. The main conclusion
is that there are no signs of any improvement in the regions’ budget systems, which, in our opinion, is
largely due to the fact that federal authorities adapt to the critical state of territorial budgets instead of
systematically solving the problems. The article can be used by government authorities for developing the
fiscal policy, experts in finance, students and researchers
Keywords
revenues, expenditures, deficit, loans, debt load, budget of rf constituent entity, public and municipal debt, increase in budget incomes