Budget deficit and surplus: definition, concept, features and characteristics

Budget deficit and surplus: definition, concept, features and characteristics
Budget deficit and surplus: definition, concept, features and characteristics

For a normal existence and the implementation of various practical tasks, the state needs money. The country's budget is formed by revenues received by the treasury. Part of the money is spent on various purposes. As a result, the state of the treasury changes regularly. There is a budget deficit and surplus. Financing is carefully regulated by legislative acts. Plans are made annually for the rational use of funds. This article will focus on the structure of the budget - the budget deficit and surplus, as well as the state loan and its functions.


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Each year, the authorities allocate an amount of money and make a list of planned activities. In addition, there are constant values ​​that are always taken into account. The budget has three different states - balance, deficit and budget surplus. It is necessary to analyze these concepts in detail:

  1. Balance is the ideal state of finances, when the country's spending level is equal (not higher and not lower) to income. Allows you to easily repay all existing debt obligations without affecting other articles.
  2. A budget deficit is when spending is significantly higher than incoming revenues. There is a shortage of funds.
  3. Budget surplus - income received exceeds all expenses. Instead of a shortage, there is an excess of funds.

Financial analysts try to achieve balance by applying special techniques for this.

Budget formulas

budget formula

What do financial states look like when presented in simple formulas?


Income – Expense=0 (zero balance).


Income – Expense=- (Negative balance, lack of money).


Income - Expense=+ (Extra funds left).

Important! When calculating public funds, a zero balance is considered the most favorable. This means that the forecasts came true and all plans were successfully implemented. The concept of budget deficit and budget surplus clearly reflect the financial condition of the state.

Lack of funds

Financial analysts are able to predict in advance what will be the state of the economy of the country, and find options to fix problems. Lack of funds is a complex problem, driven by spending.

Expense is a necessary expenditure, giving which you can get certain benefits in return. For the state theyhuge, so economists annually try to think over the financial policy, take into account all the features of the market. It is impossible to avoid spending, but to reduce it or overestimate the importance - yes.

Costs are divided into the following groups:

  • military (maintenance of the army, special equipment, military salaries);
  • economic (operation of factories, large state factories, etc.);
  • social (salaries of civil servants, pensions, provision for orphans and single mothers, payments to the disabled, social assistance provided to those in need);
  • foreign policy (foreign projects, investment);
  • administrative;
  • extraordinary (unforeseen expenses - force majeure, disasters).

For countries with a developed economy, expenses are formed much faster than income accumulates.

Important to know! The deficit and surplus of the budget depends on the timely receipt of mandatory taxes paid by citizens, as well as the completeness of the amounts.

Sources of funding

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The authorities can compensate for the lack of money in various ways. First of all, they are looking for additional sources of income:

  • release into further circulation of the money supply (starting inflation);
  • issuance of special government bonds - the formation of domestic debt;
  • request for funding sent to other states to take on external debt;
  • reduce existing spending as much as possible.

Economists define analyticalway the importance of all expenses planned for the year, trying to reduce them if there are not enough funds.

Funding sources:

  1. Domestic - bank loans, government loans, budget loans - are taken from funds from other levels.
  2. External - foreign loans, help from foreign investors.

And also offsets funding sources covering the deficit.

Cost reduction measures

deficit values

Techniques used by economists to prevent a financial crisis:

  • reorganizing the existing tax system to improve its overall efficiency;
  • debt restructuring;
  • strengthened control over existing expenses;
  • cutting spending - reducing subsidies to unprofitable industries;
  • streamlining the system regarding social benefits.

Some financiers see scarcity as a boon. It helps to reassess the economic condition of the country and to become more active in order to quickly solve problems.

Deficit limits

According to the legislation, the maximum threshold for the deficit arising in the budget has been determined - fifteen percent of the previously approved annual volume of all incomes of the Russian Federation, not counting gratuitous investments.

The maximum allowable level of deficit, for the repayment of which the state must take certain measures, is ten percent. This is provided for by Article 130 of the Budget Code of the Russian Federation.

Interesting! Loans providedBy the National Bank, the acquisition by the bank of various securities of the Russian Federation are not considered sources capable of covering budget expenses.

Sources of funding, list of expenses - everything is approved by law. This is how the state tries to control the state of deficit and surplus in order to achieve a balance.

Budget surplus

budget deficit

Rarely occurs. When a country experiences a lack of funds for several years, the authorities try to find ways to solve the problem. Income and expenses are interrelated. To reduce multi-year debt, you need to cover it with an excess.

Primary surplus is a specific concept, meaning that the amount of income coming to the treasury, not counting borrowed loans, must exceed the available expenses. The excess funds are then used to effectively pay off the principal public debt, reducing the country's financial obligations. This helps improve the economy.

The formula looks like this:

DB – K > RB – OGD


  • DB - the value of state budget revenues;
  • K - credits;
  • RB – expenses;
  • OGD - the amount of interest payments, respectively, the repayment of the main part of the debt.

Advantage or disadvantage

government loan

Pragmatic financiers don't see a surplus as a blessing. For the effective development of the economy, you need to regularly spend money. Invest them in various projects, helping them develop, and in return make a profit. When there is a large surplus,it means that a lot of money has settled idle inside the savings funds, as if a person put the accumulated funds in a bank or buried them.

The other side is the formation of a reserve. Kudrin, being the Minister of Finance, created several special reserve funds, the money of which can be used in a crisis.

Interesting! Scarcity and surplus of funds are not extremes if the size is small. Economists consider a small deficit to be the ideal state of the budget. When there are debts, but it is not difficult to cover them. Balance is exceptional as the current market is highly volatile.

Causes of surplus

The Russian Federation is a country that actively exports its own raw materials. Half of the annual income comes from money paid by foreign clients who buy oil and other exported goods.

Economists plan income, expenses, surplus and deficit, focusing on the current value of black gold. The government is looking at the amount of raw material sales, estimates the future price. If export volumes continue and the price rises, there will be a surplus in Russia.

Balanced budgets have countries that receive a different income. However, the functions of the budget deficit and surplus are identical. Both concepts determine the scale, pace of development, as well as the direction of the state's economy.

Structure of income and expenses

They annually create a deficit or surplus of the economy.

Income Costs
Tax (taxes) Non-tax General
  • profit;
  • on property;
  • state fee;
  • excise duty;
  • total income;
  • goods, services (tax levied for their domestic sales)
  • foreign economic activity;
  • public-private active partnership;
  • payments for the use of various natural resources;
  • fines, sanctions;
  • income received for services rendered;
  • confiscation of property, capital of citizens;
  • refund of subsidies not claimed on time;
  • gratuitous investment;
  • activities of various public organizations
  • ensuring border protection, internal security;
  • law enforcement and judicial systems;
  • medicine;
  • innovative projects;
  • Utilities;
  • nature conservation;
  • culture, sports;
  • media;
  • social sphere;
  • interstate projects

Government loan

A country, like individuals or organizations, can borrow or give money to someone. State can be:

  1. Borrower - draws up this agreement, which indicates the parties and the amount of loaned funds.
  2. Lender - by transferring loans to countries, ordinary citizens or companies. There is a special program of preferential loans aimed at supporting legal entities - small businesses or sectors of the economy that do not have sufficient investmentattractiveness.
  3. As an investor - buy blocks of shares or invest in various projects.
  4. Guarantor - being responsible for the fulfillment of financial obligations undertaken by individuals (organizations). If the borrower fails to repay the debt, the state does it on its own.

The country repays its debts by spending the budget. The concept of deficit and surplus reflects the state of economic affairs and determines the course of financial policy to solve problems.

Functions of public credit

budget surplus

Government credit has functions:

  1. Creation of funds - there is an attraction of money from loan capital to centralized national funds. The principles of urgency, full return and payment are used. Investors attracted by the state voluntarily transfer funds under guarantees of timely return. Securities will be the main instrument.
  2. The use of funds is the impact of the budget deficit and surplus on the country's economy. The surplus replenishes the reserves, and the shortcomings are covered by them. Funds raised must be returned. In addition to official income, the state uses an effective refinancing mechanism, when borrowed funds are spent on paying off old debts.
  3. Control - affects the liquidity of all commercial banks, effective demand and economic development.

It is noteworthy that a private investor, a company or a foreign state can become a country's creditor. Standard business relationships are formed,the only difference is that the amount of money borrowed by the state is disproportionately larger than the spending of ordinary people.


The article defines the concepts of deficit and surplus, which help to identify financial problems. They are considered universal, equally applicable to the money of a country, organization or private economy. With proper spending and investment, the owner achieves stability. For the country, this is the development of economic sectors, the prosperity of the people, as well as successful interstate relations.

The main cause of unexpected spending is the market. Changes in the exchange rate, oil prices, real estate prices - everything is reflected in finances. A budget surplus is a problem for Russia. Free funds are more efficient to use for investments.

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