Formation and allocation of the budgetary reserve funds in the Russian Federation

Abstract

Certain provisions of the Budget Code of the Russian Federation are discussed in the article, namely the formation and use of the budget reserve funds. The main purpose of the Reserve Fund of the Russian Federation is noted to cover the country's budget deficit when the world oil prices drop below a certain level. The approaches and procedures regarding the legal regulation and use of the reserve funds are analyzed in the article; a new concept for managing the financial resources of such funds is proposed, as well as financial and social effect of implementing the proposed mechanism for allocation of funds. The proposed alternative mechanism of managing reserve funds resources is stated to increase significantly the profitability of capital investments.