Theoretical aspects and the basic provisions of the state financial policy

Introduction

 

Chapter 1. Theoretical aspects and the basic provisions of the state financial policy

 

1.1 Summary of finance, financial relations and the country's financial system

 

1.2 Content, meaning and mechanism of functioning of the financial policy of the State

 

1.3 The main functions and principles of finance

 

Chapter 2. Analysis of the Financial Policy of the Republic of Kazakhstan

 

2.1 The financial mechanism as an instrument of fiscal policy

 

2.2 Policy of financial stabilization in Kazakhstan

 

Chapter 3. Modern trends in the financial policy of Kazakhstan

 

3.1 Areas of monetary policy

 

3.2 Ways of improving the tax and budget policy

 

3.3 Trends in the further development of investment and foreign trade policy in Kazakhstan

 

Conclusion

 

References

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

 

Finances are a very complex social phenomenon. They cover a wide range of exchange-distributive relations, which are displayed in the various cash flows. When a single entity in this relationship are highlighted certain elements that have their own characteristics and peculiarities. The study of finance is based on an understanding of how they need, the nature and role in society and in the detailed mastering of specific forms of financial relations.

 

In the normal functioning of any modern economic system, an important role belongs to the state. State throughout the history of its existence along with the maintenance of order, law, organization of national defense, certain functions performed in the field of financial relations. These functions within the State will comply with financial policies and practices shape the financial mechanism, operating in the financial system.

 

Thus, the financial policy of the state is a reflection of the specific forms and methods of finance in the economy and thus enabled a model of the economy to a large extent is indicated by it.

 

The variety of problems facing the state in a market economy determine the function performed by the state financial policy. To solve the problems facing the state during the execution of these functions to the State a number of mechanisms of financial policy.

 

The need to develop and systematic conduct of monetary policy occurred with the development of capitalism. The immediate impetus to the drafting and implementation of monetary policy given the economic crisis of 1929 - 1933, cast some doubt on the ability of the market system to regulate itself without active government intervention in economic life. His theoretically sound principles of financial policy have in the works of John Maynard Keynes and his followers. In the 30 - 40th years of financial policy objectives were limited primarily to the weakening influence of the overproduction crisis on the economy, maintaining high economic activity and increased demand for payment. By the 60th year the emphasis has shifted, and its main task is to achieve high employment and promotion to increase economic growth. On the 70th the same period, including also a modern financial policy, the priority was the fight against inflation, coupled with the same goals: ensuring high employment and stimulating economic growth, balancing the balance of payments, and others.

 

So, based on the tasks of the financial policies of leading economists share the last of three types: economic growth policy, a policy of financial stabilization and the policy of restricting business activity.

 

The aim of the course work - to investigate the essence of the financial policy of the state.

 

In accordance with the stated goal put forward by the research:

 

1) investigate the nature of finance, financial relations and the financial system;

 

3) to determine the mechanism of functioning of the financial policy of the state, its types, forms and methods;

 

4) analyze the financial policy of Kazakhstan, its development and current trends;

 

5) draw conclusions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter 1. Theoretical aspects and the basic provisions of the state financial policy

 

1.1 Summary of finance, financial relations and the country's financial system

 

The concept of "finance" covers a vast area of ​​economic relations associated with the distribution of social product in the form of money. The term "finance" comes from the Latin "finis" - end, finish, termination payments, the calculation of economic relations between the actors (originally in ancient Rome - between the people and the state). Later, the term evolved into "financia", applied in a broad sense as a cash payment, and then - as a collection of state revenue and expenditure and any business entities, and their complexes. The authorship of the term "finance" is attributed to the French scientist Jean Boden, who in 1577 published a paper "Six books on the country."

 

The first author of the Financial was Xenophon (430-365 years. BC. E) "On the revenue of the Athenian Republic."

 

For Aristotle (384-322. BC. E) the views set out in the field of finance in the "Athenian polity."

 

However, not every monetary transaction, the transaction is related to finance, because the money mediate the movement of the entire cost of the social product, which is carried out by different economic categories - prices, wages, finance and credit. Money Finance emphasizes the nature of the shape of their implementation and their belonging to the categories of economic value.

 

In order to allocate finance from a number of economic categories, it is necessary to move from consideration of the phenomenon of Finance to the study of nature - the inner content of the object, which is expressed in the unity of the diverse forms of its existence.

 

In the hierarchy (subordination) of social relations of money related to economic relationships, which, in turn, are included in the relations of production - a decisive part of the system of social relations. This implies that the financial relationships - is part of the relations of production, that is, they are basic.

 

Reproduction process is carried out as interconnected and interdependent combination of continuous ongoing stages: production, distribution, exchange and consumption. The four stages of reproduction determine the presence of trade relations between the actors of social production, as manufactured products act as goods subject to sale and purchase: before the product is consumed, it passes through the stage of exchange and distribution. This should meet the needs and interests of all participants in social relations, not only the participants of material production. In turn, the availability of commodity relations division of labor caused by the necessity of economic agents, which is why they have to share the results of specialized labor, services performed, in many manufactured goods, according to their quantity and quality. The comparison of benefits and values ​​created by using money as a measure of value and the universal equivalent. Therefore, the mass produced tangible and intangible goods and services - social product - other than a natural-real monetary value as well. The presence of two forms of the embodiment of the social product allows you to bring it to the final consumer in accordance with the needs of each participant in social production. For this purpose, value categories - money, money, finance, wages, credit, etc.

 

The degree of participation of individual economic categories at different stages of the reproductive process is not the same. In order to finance is generally accepted that their effect is most manifest at the stage of the distribution of gross national product.

 

Trace the emergence of financial relations can be, depending on their areas of operation - in the primary levels of the economy, that is in the sphere of material production - or in the real sector of the state as an organization that regulates public, including economic life, or in the field of public finance.

 

To understand the essence of Finance in the first case can be taken as a reference point in the process of reproduction (in whole or in individual circuit of productive assets separate entity - the manufacturer) the time of separation costs and the beginning of a relatively independent of its form of cash in the implementation of their products. In pre-conditioned by the nature of the production of shaped distribution ratio of the product is implemented on the items that match "with", "v", "m" and the formation of the corresponding funds of funds, or savings of these funds.

 

At the same time allocated revolving funds, depreciation and other deductions (such as social services), payroll, profit. In the future, there is a process of redistribution of these elements of value in accordance with the proportions to be determined by regulations of the distribution. Part of the revenue or profit will be deducted to the state for the formation of its centralized funds, while others retained by the manufacturer and used at his discretion.

 

If part of the value corresponding to the element "s" after the implementation of the product is advanced for the purchase of items of work - current assets (working capital), to ensure the continuity of the production process, from the "T", moreover, can be allocated part of that is earmarked for accumulation, that is, for the purchase of work equipment - fixed assets (capital) - the most important factor of production, as this ensures continuity.

 

In the future, generated funds of funds exposed to redistribute - crushed or, conversely, consolidation, depending on the purpose of funds to the address of their destination or use in the production and circulation of non-productive assets (capital). Thus, part of the value created by the economic entity, it remains in the circulation of the subject, is spent on the reproduction of labor power in the form of wages, social costs, is exchanged for tangible and intangible goods and services consumed and drops out of further movement.

 

Much of the value created in the material production is transferred to the national needs, and having received the independent movement in cash is included in the sphere of financial relations between the state as state revenue. In addition to the deductions from the income of the primary parts of the economy, the government mobilizes the population of the funds in the form of taxes, voluntary payments - loans, lotteries, savings held in banks with state participation. Part of the funds come from public, private and public enterprises and organizations and the public in the stock and no stock forms in the form of various fees, charges, fees.

 

So there are forms of financial relationships at the state level through the formation of centralized funds of funds - the state budget, social insurance funds, and various extra-budgetary funds. This sphere of financial relations is very diverse and involves both the creation of these funds at various levels of government - national, local, and the redistribution and use in the mentioned levels, as well as branch, departmental, regional, social principles. In addition, cash flows and fund performance is mediated by the state long-term programs - development of productive forces, social, environmental, scientific, regional, and others.

 

In the end, passing through all stages of the reproductive process, the social product is converted and translated into three separate funds: the fund compensation fund consumption and the accumulation fund.

 

As a result of the cost of the product is entering a new cycle, and part is consumed.

 

The above processes cause the complex web of financial relationships, their interaction with other economic relationships, and require a scientific approach to the study of their effect on economic performance and its ongoing development, social processes in society.

 

Based on the foregoing, we can formulate a concise definition of finance as follows: finance is a specific set of economic relations that arise in the allocation and reallocation of the cost of the social product, resulting in the formation and use income, savings and funds from the reproduction of the participants to meet their diverse needs .

 

Government finances are a means of redistributing value of products of the public and part of the national wealth. They are based on a system of budgets. A separate element of the system include government Finance budget funds for the annual events financial separate trust (pension fund, social insurance, employment fund). The concept of "financial system" encompasses a set of relations, on which are formed and used by the relevant funds of funds, as well as the bodies that organize these relations. Sometimes the term is used in the narrow sense, but as a set of financial institutions of the state that is inaccurate.

 

The term "system" means the action of interconnected elements - the subsystems, which are classified according to various criteria.

 

In the above definition lies the principal classification model of the financial system based on the intrinsic characteristics of Finance, and their place in the socio-economic processes. According to this criterion, the financial system consists of three parts:

 

1) The aggregate financial relations;

 

2) The total funds of funds;

 

3) the financial management staff.

 

The financial system is a system integration type, characterized by close ties of its constituent elements (subsystems) and the fact that none of its subsystems can not exist independently: Finance, on the one hand, the expression of the relations of production and so are the element of this relationship, with other - represent a system composed of interconnected elements, which have their functional properties. In finance, can be called as functional subsystems, such as tax, fiscal, foreign trade, financial plans (forecasts), legal support and financial controls, etc. In addition to the functional classification criteria of the financial system, is applied on the basis of classification of the subjects of Finance (involved in financial relationships) which allows to distinguish between the financial system of links

Links as the number of subordinate classification, contain elements of the higher categories: financial ratios, financial assets, the managing apparatus. This property gives the systematic nature of the financial system integration.

 

The place and role of the individual components of the financial system are not identical. The primary (main) element has a leading place among the other elements of the system because of its role in the relationship of elements and components of the system is paramount. This element of the financial system are the nation-wide finance, presented in the first state budget.

 

Finance businesses of material production are the basis of finance, it is the source link of the financial system, as in material production creates a real product - the main source of financial resources of society.

 

Finances of the population (households) are the original part of the financial system. Population (citizens) enters into a relationship with your money with a national financial system and economic entities and non-productive areas of all forms of property. These multiple relationships are related to the remuneration of the population benefit from the pension system funds, obtaining tangible and intangible benefits, on the other hand, the population of your money pays taxes, pays for the services of government and other agencies and organizations and non-productive areas. Such relationships are financial, with the exception of monetary relations associated with the acquisition of consumer goods and services in shops, markets, companies and organizations for public service (transport, communications and consumer sectors, etc.) relating to the exchange.

 

However, the specificity of Finance of the population is in a distinctive characteristic of the two parts of the financial system: the stock form and external control, though the money people can have, in each individual case, the target orientation, or to keep, and the owner manages (controls), in accordance with their own intentions. There is also manifested in a variety of monetary relations, as a purely financial nature of their - the payment of taxes and other obligatory payments to the state, payments from public consumption funds - and the transition (simultaneous) moment of interaction with the finances of other economic categories - wages, prices settlement system, the gradual disappearance of the financial relations and the coming into effect of other economic relations. Extensive financial relationships occur at this level due to the employment of nationals of the individual and small business: a relationship similar to arise in echelon finance businesses.

 

General government finances include financial relationships expressed in the state budget as a form of education in the economic foundation of centralized funding and financial plan of the state, extra-budgetary special funds as additional form of financing public needs in the public credit.

 

The state loan is included in the financial system, although the relationships are different from credit financing. But due to the fact that this type of loan is aimed to cover the budget deficit, the sustainability of public finances, the calculations are carried out on it from the budget - it can be considered as belonging both financial and credit systems.

 

The second link - finance businesses has two relatively independent:

 

• Finance businesses of material production (real sector);

 

• Finance organizations and institutions, non-production sphere.

 

In the first - finance the production sector solved the problem of formation and effective utilization of decentralized funds of funds in manufacturing companies, firms, corporations, organizations, other forms of economic activity, as well as the centralization of funds in trust and reserve funds of the parent bodies of these businesses. Finance this serve production activities, provide an active influence of financial leverage on the growth of labor productivity, to increase the effectiveness of other indicators of quality of production. This includes the following components:

 

1) finance industry manufacturing businesses and their parent bodies;

 

2) finance agricultural businesses;

 

3) finance freight transport (rail, river, sea, road, air, mains, pipelines);

 

4) finance the construction;

 

5) Finance ties (in terms of production facilities);

 

6) finance consumer cooperatives;

 

7) Water Resources Finance;

 

8) Finance geological organizations;

 

9) finance other sub-sectors of material production (procurement, procurement, trade-related extension of the production process in the sphere of circulation).

 

The place and role of the second - finance service sector in the financial system are determined by its connection with the distribution and use of national income. Financial relationships in this arise in its primary structure, and between them, with other parts of the financial system, with units of other economic systems: the price of credit, etc.

Financial service sector industries have the components:

 

1) Finance Housing;

 

2) The finance of public services;

 

3) finance public transport;

 

4) finances a number of industries (communications, etc. in terms of non-productive activities);

 

5) Finance Health and Physical Education;

 

6) finance education;

 

7) finance culture and art;

 

8) finance science and scientific services;

 

9) finance non-governmental organizations;

 

10), banking and finance, credit and insurance organizations;

 

11) commercial finance and intermediary organizations (including commodity and stock exchanges, brokers, funds, etc.);

 

12) finance controls;

 

13) Defense Finance;

 

14) finance the protection of law and order.

 

In this section of the financial relations serve the movement has created value through the reallocation of consumption in order to continue through the formation of many funds of funds for various target character.

 

The set of centralized and decentralized funds of funds, the inherent links of financial relations, is the second part of the financial system. Material content of finance is reflected in the development and use of financial resources, including many money funds: The budget, the public and private social security and welfare, depreciation, working capital, consumption. Some funds are more centralized, while others - to a lesser, some funds are always spent (consumption fund), while others are temporarily stored (reserves), and others - are accumulated (depreciation).

 

The forms of financial relationships and funds of funds managed form a material object. Manager acts as the subject of a financial device, which is a system of state apparatus and public financial management and is the third part of the financial system.

 

The financial unit dealing with economic and job control in the process of organization and planning of financial operations, improving communications links of financial relations is compatible with other parts of the financial system and an organic part of it. This means weaving in the financial system as a base and superstructure relations, and handling it.

 

Along with the concept of the financial system, there is a generalized notion of financial and credit system, which includes not only links the financial system, but the credit system. Financial and credit system of the joint operating mainly in the sphere of material production, as in non-manufacturing sector lending relationships are limited, although the lending institutions are non-productive sphere.

 

1.2 Content, meaning and mechanism of functioning of the financial policy of the State

 

In any society, the state uses the funds for carrying out its functions and tasks to achieve specific goals. An important role in achieving these goals is fiscal policy.

 

In recent years, issues of public policy and financial issues of financial regulation Economy in Transition is devoted to a large number of publications. However, no consensus on the theoretical aspects of this issue is not reached.

 

Thus, the major western economists do not give a clear definition of fiscal policy. For example, Stanley Fischer, Rudiger Dornbusch and Richard Schmalensee not allocate fiscal policy as an independent concept. At the same time, they are suitable to the study of the topic, expanding the definition of fiscal policy. They write that fiscal policy is a decision taken by the State with respect to their costs and revenues. Similarly, consider the problem and some other representatives of foreign business schools. In particular, Campbell R. McConnell and Stanley L. Brue combine the concepts of fiscal and fiscal policy, identifying them as changes introduced by the Government in the order of government spending and taxation, aimed at ensuring full employment and noninflationary domestic product. Of course, this interpretation raises a number of uncertainties in understanding the essence of monetary policy

 

A more structured definition of the issue looks at the Marxists, who see a financial policy in the first set of government measures to stabilize the financial resources, their distribution and use for the state of its functions, indicating that the social orientation of the impact and effectiveness of fiscal policy on the development of productive forces and production relations are determined by the objective laws of economic development, social and political systems of the country. However slim the arguments in my opinion, is violated when the Marxist school of fiscal policy is treated as a set of financial measures of the bourgeois state to regulate government spending and revenue to achieve certain socio-economic goals. It is emphasized that it is reflected the financial aspect of the economic functions of the bourgeois state.

 

Thus, in the Marxist interpretation of fiscal policy also does not have the complete definition, since the scope of fiscal policy is almost identical to the area of ​​financial policy, in both cases representing, the totality of the state of regulation and allocation of financial resources. The coincidence of the concepts explained by the fact that the distribution involves managing the income and expenditure, that is, to distribute anything you want initially is to get (revenue), and then transfer (flow).

 

Great contribution to the understanding of the nature of fiscal policy have made the domestic economists.

 

Professor V. Lavrov, revealing the essence of monetary policy, pointed out its connection with the accounting and control over production, the quantity of labor and distribution of products. These issues have been the base for determining the immediate tasks of fiscal policy in the field of national banks, monopolization of foreign trade, state control of money circulation, the introduction of taxes. Fiscal policy was seen then as a major in economics and government regulation was associated with the provision of financial centralization, concentration of forces and resources for economic transformation.

 

Another economist, I. Levchuk, emphasizing the important role of financial policies to increase production, said that this policy is designed to create the right mix of centralized and democratic governance in the allocation and use of financial resources.

 

An interesting interpretation of financial policy, this VS Pavlov. It comes from the continuity of finance and credit in the public administration and links the financial and credit policies with the terms of the real financial and economic situation, trends and methods of restructuring the financial and credit system, new approaches to solving problems of economic reform.

 

The content of fiscal policy is multifaceted. It includes the following major units:

• production of scientific concepts of development finance. They are formed on the basis of studying the requirements of economic laws, a comprehensive analysis of the development of the economy, prospects of development of productive forces and production relations, the needs of the population;

 

• identification of key areas of finance for the future and the current period, at the same time come from the ways of achieving the goals of economic policy, international factors are taken into account, the growth opportunities of financial resources;

 

• implementation of practical actions aimed at achieving the goals.

 

The unity of the three main sections determines the content of fiscal policy.

 

Depending on the duration of the period and nature of the tasks fiscal policy is divided into a financial strategy and financial strategy.

Financial Strategy - a long-term course of monetary policy, designed for the future and providing for solving large scale problems, certain economic and social strategy. In the process of developing its projected major trends in finance, formed the concept of their use, and outlines the principles of organization of financial relations. The choice of long-term goals and drawing up targeted programs in the fiscal policy needed to concentrate financial resources on the main directions of economic and social development.

 

Financial tactics aimed at solving problems specific stage of development of society through the timely changing the way the organization of financial links, rearrangement of financial resources.

 

Strategy and tactics of monetary policy are interrelated. The strategy of creating favorable conditions for solving tactical problems. Tactics, identifying crucial areas and key problems of economic and social development through the timely change in the methods, forms of organization of financial links, allows you to more quickly with minimal losses and the cost to solve the problems envisaged financial strategy.

 

With the development of financial policies should be based on specific historical conditions. They should be specific to each stage of development of society, especially as the domestic and international situation, the real economic and financial capacity of the state.

 

Accounting features as the moment requires a thorough study of the experience of the previous economic and financial development, new trends and innovative events of the world experience.

 

An important requirement for financial policy is to comply with a comprehensive approach in its design and implementation, ie coordination of the activities undertaken at all levels of the financial system, through their focus on core performance, a key task a certain stage of development, as well as ensuring the close relationship between the components of economic policy - financial, credit, pricing policies, wages.

 

The aim of monetary policy is the most complete mobilization of financial resources needed to meet the urgent needs of society. In accordance with this financial policy is designed to create favorable conditions for business activity. Much attention is paid to the definition of rational forms of seizure of proceeds to the state enterprises, as well as the share of people's participation in the formation of financial resources. The importance attached to improving the efficiency of utilization of financial resources through their distribution between the spheres of social production, as well as their concentration in the main sectors of economic and social development.

 

Evidence-based fiscal policy in the proper and successful implementation of its positive results. Its value lies in the fact that it may be accompanied by increased levels of well-being of the people.

 

Fiscal policy plays an important role in the development of productive forces and managing their placement across the country. It helps to ensure financial resources targeted programs, concentrating resources on key areas of economic development, stimulate the growth of production efficiency, increase the interest of all the regions in economic development, the use of local raw materials.

 

Fiscal policy and promotes the development of economic relations with all countries of the world, providing conditions for the implementation of joint activities.

 

Each economic category has its own specificity, manifested through certain forms and methods of expression of the relationship. It is these concepts - the types, forms and methods of implementation relations - serve as an instrument of economic life, the mechanism of control related processes. Finance as a specific category of distribution involved in the distribution and redistribution of the product created by the formation and use of various trust funds of funds. Therefore used in the mechanism of this process - the kinds of forms and methods of expressing the financial relations associated with the formation and use of cash income and funds.

 

The term "mechanism" has a technical background and in the economic sense means a device that can bring something to the effect, to encourage certain activities. In this sense, the term is used in the management, and are associated with the content of the impact of the control subject to a managed object is defined economic objectives, including fiscal policy.

 

Finances are organically connected with the whole system of management and its components such as planning, forecasting economic incentives, organization and management. Moreover, finance, and interact with those components of the social mechanism, as a general concept that defines the dynamics of the system of social relations.

 

The financial mechanism, as well as the economic mechanism as a whole, has an internal, inherent structure. For its characteristics it is advisable to use the concepts of systems analysis, as a subsystem, unit, element, defined as units of the financial mechanism.

 

The subsystem (part of) the financial mechanism is the most important driving forces of the financial mechanism - financial planning, financial instruments and incentives, organizational structure and legal status of the financial system, the organization of government.

 

Unit (unit) of the financial mechanism - a set of homogeneous interconnected elements, united on the basis of a common focus.

 

An element of the financial mechanism - this is the simplest economic form, through which are manifested in a specific way the interests of participants in social production.

 

Dialectics of Finance in public life is manifested through the interaction of forms of expression and methods of action.

 

In real life, economic and financial mechanisms that abstract economic (cost) categories are specified and serve as a concrete form.

 

Under the specific forms of these categories are understood to be planned, changed, and take into account the people. The specific form - it is a form of realization of economic categories. Do not over finances in general, and through their concrete forms (financial subcategories) - the budget, revenues, costs are economical use of human laws to their advantage. In this sense, the concrete forms are referred to by cost control levers processes of reproduction.

 

Method - a method of action to implement the control functions, and the way most rational in the circumstances. Methods of application are the various forms of economic laws, the prisoners in certain categories (price, finance, profit, taxes, income, etc.).

 

Manifestations of financial relations can be concretized in more detail depending on the level of economic management (national economy as a whole, the sector of the economy, economic region, sector, subsector, the entity, the administrative-territorial unit). Therefore apply a more concrete form - controls: for example, the income is allocated the value added tax, excise duties, income tax revenues from state-owned property, rents, etc., the cost - the cost of the economy (with further detail), the social and cultural goals (education, health, social security and welfare, etc., science and management). A wide variety of specific forms and methods of control applied to the primary level - firms, companies, organizations, institutions for the regulation of diverse financial relationships.

 

In the economic and financial mechanisms are the financial and economic regulations and limits. Standards - Payment of costs or reasonable value of resource allocation limits - limits the size of the resources used in financial planning. With their help, provided the optimal combination of national distribution relations, collective and individual interests, balancing the needs of the state, regional, sectoral and departmental governments, business units of the resource requirements for implementation of the tasks of prospective and current plans for economic and social development.

A characteristic feature of the financial mechanism is its dynamism, continuous improvement, working closely with the functioning of the economic mechanism.

 

The components of the economic mechanism separate mechanisms, as well as the corresponding relations are closely interrelated.

 

Element of any malfunctioning of the mechanisms - pricing, financial, credit - can block the work of other elements, links and the economic mechanism as a whole. Therefore, the action component of the financial mechanism should be considered with related components of other economic mechanisms when they interact in specific circumstances, taking into account a combination of public interest, self-supporting primary care, individual employees.

 

A complex system of economic mechanism, its parts, levers, elements are in constant change, in accordance with the interaction and tasks put forward by a certain stage of development of society, for its production or part of these terms, related to the development of a sphere sector of national economy.

 

Fiscal policy, generated on the basis of objective laws of a particular stage of social development, provides a means for its realization, ie the establishment, improvement or elimination of the individual components of the financial mechanism, including leverage. Society, revealing the real contradictions of the economy, economic interests, creating specific financial forms used to manage as leverage to overcome the emerging negative trends and to promote socio-economic development.

 

With the transition to market relations in practice there were such thing as a joint-stock companies, securities, dividends, free pricing, licensing, consumption and accumulation funds of enterprises, foreign currency funds, introduced new types of taxes (excise tax, value added tax, land tax, property, customs duties and taxes on the subsoil, etc.), the target allocations of funds.

 

The above components of the new financial mechanism designed to enhance the creative potential of enterprises and individuals to accelerate scientific and technical progress, intensification of production by acting on the material interests of the people, the convergence of the interests of society, the basic cost-accounting managers, individual employees.

 

Ongoing reform requires a comprehensive approach to restructuring the economic mechanism, which is a manifestation of the interaction of the productive forces and production relations in the public system.

 

The tasks of improving the financial mechanism at the present stage of economic development related to the general democratization of production, the introduction of commercial principles, market regulation, increasing economic interest in the outcome of management. Through efficient use of cash income, savings and assets is the impact of the financial mechanism for the production of the final results.

 

Financial mechanism permeates all aspects of industrial relations of society. So with the help of an effective, well-functioning financial mechanism can actively influence the production, improve efficiency and provide financial resources for economic growth.

 

Financial Policies - a set of purposeful intentions and activities undertaken by the state in the field of finance to carry out their functions and tasks. Fiscal policy is an integral part of economic policy.

 

In a system of materialist dialectics, fiscal policy, like any other policy, refers to the superstructure, as opposed to financial relations which it expresses, are basic - acting as part of the relations of production, certain socio-economic structure.

 

As economic policy in general, fiscal policy is developed by the State based on the requirements of economic laws - the essential, recurring stable, objective relationships and interdependencies of phenomena and processes in the economic life of society.

 

Industrial relations in society, determined by economic laws, manifested through the categories. Economic categories - the expression of homogeneous economic relations that characterize a certain aspect of economic life and are presented in the abstract, generalized form: these include the price, finance, insurance, credit, income, etc.

Finance, as an economic category, based on the action of economic laws (the law of value, the law of supply and demand, the law of increasing requirements, compliance with the law of industrial relations nature and level of development of productive forces, the law of economy of time).

 

Fiscal policy is implemented in real economic life through the financial mechanism. The latter is a system of forms and methods of organization, planning and financial management. Through the financial mechanism to control the financial relations of the formation and use of trust funds in cash and cash savings for the state programs of economic and social development at different levels and spheres of economic reality.

 

As finance as a more general economic category consists of individual financial subcategories to a lesser degree of abstraction (taxes, budget, etc.), we can distinguish with some degree of independence of fiscal policy, fiscal policy and the corresponding mechanisms - tax, budget and financial plans management, financial management, financial and legal.

 

The financial policy of the state is divided into a financial strategy and financial strategy. The first is a course designed for the long term and providing the solution of large-scale problems of economic and social development. The financial strategy has been developed by the state for major historical stages of social development. Financial tactics specifies the strategic vision, with a focus on solving immediate problems, overcoming the distortions and deviations in finance and economy of the country, region, industry.

 

Financial mechanism embodies the planned State financial arrangements in specific, targeted, real results - the expanded reproduction of the financial resources that make up the cost of all the many elements of the social product, intangible goods, services and values ​​at all levels and in areas of socio-economic life. The variety of results is the reproduction of the corresponding variety of forms and methods of economic (economic) mechanism, an integral and inalienable part of which is the financial mechanism.

 

Thus, a closed circular pattern seen when the production process, determined by the economic laws of social formation, the presence of certain industrial relations and related categories, regulated economic policy which is embodied in the economic mechanism of action, the latter, in turn, contributes to the reconstruction of real results in the appropriate replacement quantitative and qualitative terms. The dialectic is valid on the rising pattern in the form of the principle of dialectical spiral (under normal conditions of reproduction).

 

Therefore, on fiscal policy and the financial mechanism, as a part of economic policy and a mechanism for independent normal process of expanded reproduction. Correctly formulated monetary policy, clearly adjusted synchronously operating the financial mechanism contribute to the socio-economic development of society. There is also a reverse trend: if monetary policy does not fully take into account the effect of economic laws, or is in conflict with them, the appropriate financing mechanism is not fully or not able to use the productive capacity of the national economy, industry, region, etc.; In this case, the economic development of society retarded, accumulated negative effects, there are anti-social processes. Such a situation arises in the application of administrative and strong-willed, overly centralized management methods that ignore the requirements of objective economic laws.

 

1.3 The main functions and principles of finance

 

The basis of market relations make money, linking the interests of sellers and buyers. As a result of economic relations arise regarding financial, under which market participants make and use the money for different purposes, thus creating their own respective monetary funds. At the same concept and function of finance is a key category of interaction of market entities.

 

Finances have the following common features: they are associated with the state, the process of production, commodity-money relations, are a category of value (money), carried out the distribution of GDP and ND, are expressed in real money funds. The essence of the role and functions of finance related.

 

 

The essence of Finance revealed through the finance function. They are realized through the financial mechanism, which includes the organizational form of financial relations in the sphere of the economy, the use of money and the formation of centralized and decentralized funds, financial planning techniques, financial law, financial planning techniques, etc.

 

Finance perform several functions. By function we mean the manifestation of the economic category of its essence, it is revealed through a range of responsibilities, which performs this category. Finance Options are stable and objective.