The Essence of Local Budgets and Their Importance in the Socio-Economic Development of Regions

Abstract

This article extensively highlights the economic essence of local budgets, their sources of formation, expenditure structure, and their role in socio-economic development. Initially, various economic and legal definitions of local budgets are analyzed, clarifying their primary functions and characteristic features. The revenues of local budgets are studied separately as own revenues, assigned revenues, regulatory revenues, and financial transfers. Expenditures are classified based on a two-tier budget system. Additionally, the article substantiates the relevance of regional budget autonomy and mechanisms for their formation and management. The impact of local budgets on social spheres, the economy, infrastructure, and employment is illustrated with examples. This article provides a comprehensive analysis of the economic nature of local budgets, the principles of their formation, and their direct and indirect impact on the socio-economic development of regions. Local budgets are an integral part of the state financial system, and their correct and effective organization plays a decisive role in a number of important factors, such as the development of infrastructure in the regions, improving the living standards of the population, supporting social sphere facilities, and stimulating entrepreneurship. The article covers the sources of formation of local budgets, inter-budgetary relations and tax-based distribution mechanisms, as well as modern approaches to their management on a scientific and theoretical basis. In particular, special attention is paid to the reforms being carried out to ensure the financial independence of regions and districts, ways to increase budget revenues, as well as urgent issues of ensuring cost efficiency, using the example of the Republic of Uzbekistan.