Budgetary Support for Commercial Organizations in Russia: Experience and Prospects

Budgetary support for commercial organizations has traditionally been one of the most controversial areas of public spending. The search for reserves to save money is becoming particularly relevant in the context of the budget deficit, which has been almost constantly observed in Russia since 2020. The article is devoted to the analysis of the evolution of domestic legislation on issues of subsidies for commercial organizations (hereinafter also referred to as industrial subsidies) and the practice of its application. The article considers the reasons given in the economic literature for budget support for commercial organizations and the associated risks, as well as the approaches of international organizations to defining the term “industrial subsidies”. One of the main conclusions of the article is that currently neither foreign nor domestic statistics provide an adequate picture of the scale of industrial subsidies. Nevertheless, the article attempts to estimate the minimum amounts of such subsidies from the consolidated budget of the Russian Federation. Another important conclusion is that due to the progress of legislation, the bulk of industrial subsidies in Russia are now distributed competitively according to transparent rules. At the same time, the article makes suggestions on ways to further improve legislation in this area, including: introducing a mechanism for stakeholders to appeal decisions taken by budget managers during the selection process; improving statistics on the volume of industrial subsidies; adjusting the rules for the distribution of subsidies among the selection participants; refusal to provide state guarantees without the right of recourse and abandoning practice of reserving budget allocations to support the economy.