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The state budget

Lessons 13 · 1 lessons · E. Sariqov, B. Xaydarov. Fundamentals of Economic Knowledge (Economics), Grade 9, 4th edition. “Huquq va Jamiyat” publishing house, Tashkent, 2019
13

The state budget

Textbook: pp. 60–63
GoalKnow the state budget, its revenue and expenditure parts, transfer payments, budget deficit and surplus and public debt; carry out simple budget calculations.
New words
state budget · davlat budjetitransfer payments · transfert to‘lovlaribudget deficit · budjet kamomadipublic debt · davlat qarzi
Explanation

The state budget is the main financial plan showing how much money the state collects in a year and what it spends it on; the Oliy Majlis adopts it by law and at year-end the government reports on how it was carried out. The main source of revenue is taxes: those on citizens’ income and on firms’ profits, as well as profits of state enterprises, money from selling state securities and property, and state duties. A state duty is a payment for certain services given by state bodies or for bringing certain goods into the country. Expenditure goes on education, science, health, defence and public order, the environment, public administration and transfer payments — pensions, benefits, stipends and support for low-income families. If expenditure exceeds revenue a budget deficit appears; if revenue exceeds expenditure there is a budget surplus. The sum of deficits accumulated over the years makes up the public debt, which can be internal (owed to its own citizens and organisations) or external (owed to foreign states and international financial institutions).

Worked examples
A conditional state budget (bln so‘m): revenue — income tax 90, VAT and excise 140, property and resource payments 50, other 20, total 300. Expenditure — social sphere 160, economy 50, administration 20, other 90, total 320. Deficit = 320 − 300 = 20 bln so‘m; the share of the social sphere is 160 : 320 · 100% = 50%.
If deficits in three years in a row are 20, 15 and 25 bln so‘m and the debt is built from them, public debt reaches 20 + 15 + 25 = 60 bln so‘m. If in the fourth year the budget closes with a 10 bln so‘m surplus, the debt stops growing and a way opens to repay it.
Class activity

“Neighbourhood budget”. The class draws up a conditional neighbourhood budget: revenue 600 mln so‘m (taxes, support) and a list of needs (road repair, lighting, park, playground, library). Groups choose priorities, divide the money and justify their choice in a debate.

Practice
1
Name three sources of revenue of the state budget.
2
Revenue is 480 bln and expenditure 520 bln so‘m. What is the budget deficit in bln so‘m?
3
Expenditure is 700 bln so‘m, of which 35% goes to the social sphere. How many bln so‘m does the social sphere get?
4
Why are pensions and stipends counted as transfer payments?