Subventions - these are some amounts of funds that are allocated from the budget of the highest level by decision of the state authority on a free and non-refundable basis to the budget of the lower level. However, these amounts of money must be spent for specific purposes.
Grounds for Subventions
Subventions are provided in case of insufficient sources of income, regulated and secured, in order to equalize the minimum level of financial support for municipalities and constituent entities of the Russian Federation.
Granting of subventions is carried out in accordance with the adopted decisions of certain governing bodies.
There are cases when subsidies are presented to municipalities or budgets of constituent entities of the Russian Federation in cash, which were allocated to finance specific types of expenditures from the top-level budget, subject to share participation in them.
Subsidies and subventions - these are financial resources that are subject to return in case of their inappropriate use or non-use at certain times.
Regulatory documents for the provision of subventions
The grounds for the provision of subventions are:
- relevant legislation;
- decisions of local authorities ;
- various targeted programs, including federal ones.
Legislative acts provide for the allocation of additional funds in case of occurrence of unplanned expenses by business entities and lower budgets. Also, if such costs arise for business entities, the size of subventions is established by decisions
of local authorities.The target program for the provision of subventions is a set of measures of a scientific, technical, organizational or social nature, aimed at achieving a specific goal. Such programs, depending on the types of tasks to be solved first, can be divided into: foreign economic, scientific, technical, industrial, social, economic and environmental. Today, budget subventions are spent mainly on the implementation of foreign economic and socio-economic programs.
Given the level of implementation of targeted programs, they can
- federal, which pursue the goals of the federal level; subdivided:
- regional, which are aimed at achieving goals within specific subjects of the Russian Federation.
Recipients of the subvention are legal entities or subordinate budgets. Similar funding can be allocated to citizens.
Subsidies and subventions: similarities and differences
There are both similarities and differences between subventions and subsidies. The similarity is related to the targeted use of allocated funding. Moreover, if subventions or subsidies were used for other purposes, then they are subject to mandatory return to the budget from which they came.
The difference between these two concepts is the share of the budget in the provision of subsidies.