Consolidated Budgets of the Subjects of the Russian Federation in 2020: Opportunities for Fulfilling Obligations in the Context of the Crisis

Abstract

In the context of the economic crisis of 2020, triggered by the global pandemic, regional budgets faced a pronounced drop in tax revenues. The regions, whose economy is based on the extractive sector and metallurgy were most seriously affected. The drop in corporate income tax receipts in some regions was critical. At the same time, due to the implemented measures to support employment and income of the population, the personal income tax receipts have even increased. The most important element of supporting regional budget revenues was a significant increase in federal transfers. In fact, all categories of intergovernmental transfers (grants, subsidies, subventions, and other transfers) were used to support regional budgets. At the same time, the most financially prosperous subjects of the Russian Federation solved the problems that arose mainly at the expense of their own reserves. The result was the ability of the regions to increase spending in the most important areas (health, social policy). Nevertheless, it was not possible to avoid a pronounced increase in budget deficits of the subjects the Russian Federation and an increase in the volume of state sub-federal debt.