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Journal number 3 ∘ Besik Bolkvadze

(Expanded Summary)

The article is dedicated to the most important issues of the country’s public finance as follows: frequency of budgetary changes, program budgeting, budgetary planning and analysis of its fulfillment, public budget considerations, quarterly breakdowns, distribution of budgetary assignments, projection of capital flows, reserve funds, change of budgetary remaining amount. The work suggests author’s opinions towards abovementioned problematic issues.

At every stage of economic development of the country, as it is well known, the key priorities of the economic policy, in the sphere of public finance, are fiscal decisions and their effectiveness that are depicted in the implementation of the budgetary policy. Rational budgetary policy is to be directed towards the economic grows and sustainable development, on the one hand, and at the same time it must provide sound business environment with the keeping of relevant budgetary-taxation mechanism, on the other hand.

It should be noted that formation and functioning of the effective and efficient budgetary system is considered to be result-oriented only in terms of compliance with the state socio-economic strategy and coherence of the state financial management. In this regard, permanent improvements of the budgetary policy is of macro prime importance as the management of public finance is a complex phenomenon and is linked with integrated institutional tissue of public functions implementation.

In transition phase of economy the budgetary system of the country experienced significant systematic changes and challenges from reformation point of view that provided systematization of regulatory norms of budgetary system and arrangement, institutionalization of budgetary process, unification of budgetary classifications, rationalization of budgetary accounting and accountability, regulation of public expenditures, relative optimization of inter-budgetary financial flows, standardization of the budgetary mechanism with taking into consideration of international practices, coordination with priorities of budgetary cycle. In spite of the abovementioned positive changes the perfection of budgetary system remains as the main challenge of the budgetary policy because in the process of its working out and implementation consistently originate some disproportions and discrepancies that raise in the foreground the task of identification and solution of problematic budgetary topics.

The article considers the most problematic and topical issues of the contemporary state budgetary policy of Georgia, where the role of public finance management is underlined,  negative impact of frequency of budgetary changes is given, importance of program budgeting facilitation is considered, budgetary classification and real projections issues are discussed, significances of inevitability of budgetary programs and subprograms assessment are reasoned, budgetary assignment rules and regulations are analyzed, peculiarities of capital projects and respective flows are characterized, issues of state procurement system, special reserve funds and changes of budgetary remaining amount are also accented.

Thus, the management of public finance in transition economy of Georgia requires complex and systematic approach and timely responses by relevant policy implementation persons who are responsible for resolving core problematic budgetary issues which themselves are connected with principal problems of program budgeting and present the inevitable prerequisites of macroeconomic and macro finance equilibrium.