Budget credit: The evolution of lending goals

Subject. Budget loans as an instrument of fiscal policy. Objectives. To analyze the purposes for which budget loans are provided in the Russian Federation and to demonstrate how their orientation has expanded over time. Methods. General scientific methods were employed. Results. The debt of the constituent entities of the Russian Federation on budget loans was analyzed over a 16-year period: a significant increase in debt is associated with the introduction of the infrastructure budget loan mechanism in 2021. It was found that the purposes of budget loans have broadened: they are used not only to address the debt sustainability of the regions, but also for their infrastructure development and increasingly for the implementation of national development goals. Budget loans were rarely used for investment purposes: they were directed toward financing sports facilities for the 2013 Summer Universiade in Kazan and the 2014 Winter Olympics in Sochi. Conclusions and Relevance. Given the existing inequality among the constituent entities of the Russian Federation, regions with low budget capacity have fewer opportunities to attract infrastructure budget loans. They can obtain loans only for small-scale investment projects, which does not resolve the problem of inequality. To address it, a special mechanism is needed, which can also be implemented through budget loans. The results can be used in developing the main directions of the state fiscal policy of the Russian Federation.