Financial policy and its components

What is financial policy? First of all, this is the sum of all actions aimed at using finance and relations related to the distribution of national wealth and income. In addition, this term refers to the implementation of activities designed to use these relations so that the state can perform its functions.

What is the content of financial policy?

• In order to ensure the timely provision of state activities, the concept of financial policy is first developed, objectives set and goals defined.

• The second stage is the creation and continuous improvement of a competent financial mechanism.

• Adequate management of the monetary policy of the state, as well as other economic entities.

It should be borne in mind that the financial policy is based on strategic principles that determine the use of finance in the future, providing for the solution of all the main tasks of the country. Along with this, the state determines the tactical goals of using finance. These events constitute a single complex, they are closely intertwined.

What are the objectives of the state financial policy?

• Creating an enabling environment for the accumulation and use of the maximum amount of financial resources.

• Develop a scheme of rational, profitable use of financial resources to the state.

• Use of financial mechanisms to stimulate diverse processes (for example, social or economic).

• Continuous updating and improvement of the financial mechanism, ensuring its compliance with changing goals and strategies.

• Creation of an operative, adequate, convenient financial management system.

Financial policy is always closely intertwined with other segments of the economy: credit, money, and price.

In order to take into account the results of the policy and to evaluate them, it is necessary to take into account how much it corresponds to the interests of citizens, social groups of society, whether it has achieved everything that was conditioned by the goals set.

Financial policy is impossible without a mechanism that ensures the activity of any state in the field of financial redistribution. A financial mechanism is a special system developed by specialists and a system fixed by the state, which unites all structures and types of financial relations. It includes the following components:

• forms of resources and methods of their creation,

• Legislative base regulating the movement of finance, organization of the securities market, enterprise finance, budget system.

Finmechanism is divided into directive and regulatory.

The first is created for financial relations with the direct participation of the state. This includes taxes and budget financing, financial planning, budget expenditures and its full organization. Often, a directive mechanism can affect the securities market (corporate), other relationships that are important for financial policy in general.

The regulatory mechanism works where the interests of the state are not directly affected, for example, in private enterprises. Here the mechanism regulates only the general drawing of the use of financial resources.

What are the objectives of financial policy?

• Political.

• Economic.

• Social

It should be remembered that financial policy as a unity of actions aimed at achieving the goals can use its mechanisms and techniques to solve problems at different levels, from the world to the level of the household.

The financial policy can be classical, planned-directive, regulating.