კონფერენცია

∘ Nona Kavtaradze ∘
THE ROLE OF THE STATE BUDGET IN THE FINANCIAL SUPPORT OF SOCIAL POLICY

Summary

Today, one of the most important tasks of the state is to preserve the stability of the economy and determine future prospects for its development. The state budget as a central role in the budget system plays a crucial role in improving socio-economic conditions of the country and ensuring its further development, which adds more and more to the issue of complex study-analysis of current challenges in this field.

In the financial support of the country's social policy, the issue of determining the place and role of the state budget should be started by analyzing the dynamics and structure of the budget parameters indicated by the Law of Georgia on the State Budget of Georgia of 2019.

Based on the analysis of the budget estimates of 2019, we note that the total volume of assignments allocated from the State Budget in the sphere of separate sectors of social sphere (namely: healthcare, education and social protection) amounted to 42.5 percent of the total budget expenditures and 549.3 million lari in 2018. The planned outlay for allocation for health care in 2019 is 59.6 million GEL compared with the previous year 2018, the cost of education financing is 129.3 million GEL, while social security costs exceed 360.4 million GEL by 2018, resulting in the financing of the abovementioned sphere of 2019 total volume of 5 562.2 mln Gel was made. The trend of appropriations in the social sphere has been marked especially in 2013-2018, making it possible to realize many important state programs in order to improve their social condition. Based on the data of the National Statistics Office of Georgia, the number of unemployment levels in the country is observed from those years. As a result, the unemployment rate in 2018 decreased by 1.2 percent compared to the 2017 level and 12.7 percent. The data related to this issue is partly different from the data of the International Labor Organization, namely ILO Surveys in Georgia, 14.1 percent in 2018, and its forecast indicator is 14.3 percent in 2019. It is noteworthy that unemployment rate is quite high in comparison with the average number of countries in the Central and Western Asian groups. Based on the above-mentioned, the International Labor Organization (Together with the Angola, Bangladesh, Congo, Egypt and other countries) belongs to a low-middle-income group of countries. It is noteworthy that the problem of unemployment is characterized by more or less of the risk for developing market economies as well as states in transition to market economy. Our analysis shows that in the 2010-2018 years, positive trend in the direction of state budget revenue mobilization and the performance of duties plan somehow provided funding growth opportunity in state budget allocation to the social sphere sectors (health, education, social protection) funding growth opportunity, the current tendency is also reflected in the planned parameters of the basic parameters of the 2019 state budget. However, despite this, the important issue is the growing inequality of revenue. According to the World Bank's research, the GINI coefficient, which represents an inequality index among population revenues, is 37.9 percent in 2017 (latest data), which is 1.3 percent more than in 2016, indicating that social inequality is more in 2017 In comparison with 2016. As for the UN Human Development Index, according to the latest data (2017), Georgia is the 70th in this index.

In order to improve the state of the country's socio-economic sphere as well as the optimization of state budget expenditures, we think it is recommended to carry out the following activities:

1. In order to elaborate an effective employment mechanism, it is properly implemented to further fund the state targeted programs.

2. As far as we know, the state budget should ensure the level of social and economic development of the regions of the country. It is noteworthy that according to the data of the National Statistics Office of Georgia, since 2007 the poverty rate in rural areas is much higher than the urban population.

Thus, the role of the state budget in the socio-economic development of the country is of utmost importance. Consequently, carrying out of fiscal policy oriented towards improving the social condition of the country is one of the most important issues to improve social-economic development of the country and the well-being of the population.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Nona Kavtaradze ∘ THE ROLE OF THE STATE BUDGET IN THE FINANCIAL SUPPORT OF SOCIAL POLICY Summary Today, one of the most important tasks of the state is to preserve the stability of the economy and determine future prospects for its development. The state budget as a central role in the budget system plays a crucial role in improving socio-economic conditions of the country and ensuring its further development, which adds more and more to the issue of complex study-analysis of current challenges in this field. In the financial support of the country's social policy, the issue of determining the place and role of the state budget should be started by analyzing the dynamics and structure of the budget parameters indicated by the Law of Georgia on the State Budget of Georgia of 2019. Based on the analysis of the budget estimates of 2019, we note that the total volume of assignments allocated from the State Budget in the sphere of separate sectors of social sphere (namely: healthcare, education and social protection) amounted to 42.5 percent of the total budget expenditures and 549.3 million lari in 2018. The planned outlay for allocation for health care in 2019 is 59.6 million GEL compared with the previous year 2018, the cost of education financing is 129.3 million GEL, while social security costs exceed 360.4 million GEL by 2018, resulting in the financing of the abovementioned sphere of 2019 total volume of 5 562.2 mln Gel was made. The trend of appropriations in the social sphere has been marked especially in 2013-2018, making it possible to realize many important state programs in order to improve their social condition. Based on the data of the National Statistics Office of Georgia, the number of unemployment levels in the country is observed from those years. As a result, the unemployment rate in 2018 decreased by 1.2 percent compared to the 2017 level and 12.7 percent. The data related to this issue is partly different from the data of the International Labor Organization, namely ILO Surveys in Georgia, 14.1 percent in 2018, and its forecast indicator is 14.3 percent in 2019. It is noteworthy that unemployment rate is quite high in comparison with the average number of countries in the Central and Western Asian groups. Based on the above-mentioned, the International Labor Organization (Together with the Angola, Bangladesh, Congo, Egypt and other countries) belongs to a low-middle-income group of countries. It is noteworthy that the problem of unemployment is characterized by more or less of the risk for developing market economies as well as states in transition to market economy. Our analysis shows that in the 2010-2018 years, positive trend in the direction of state budget revenue mobilization and the performance of duties plan somehow provided funding growth opportunity in state budget allocation to the social sphere sectors (health, education, social protection) funding growth opportunity, the current tendency is also reflected in the planned parameters of the basic parameters of the 2019 state budget. However, despite this, the important issue is the growing inequality of revenue. According to the World Bank's research, the GINI coefficient, which represents an inequality index among population revenues, is 37.9 percent in 2017 (latest data), which is 1.3 percent more than in 2016, indicating that social inequality is more in 2017 In comparison with 2016. As for the UN Human Development Index, according to the latest data (2017), Georgia is the 70th in this index. In order to improve the state of the country's socio-economic sphere as well as the optimization of state budget expenditures, we think it is recommended to carry out the following activities: 1. In order to elaborate an effective employment mechanism, it is properly implemented to further fund the state targeted programs. 2. As far as we know, the state budget should ensure the level of social and economic development of the regions of the country. It is noteworthy that according to the data of the National Statistics Office of Georgia, since 2007 the poverty rate in rural areas is much higher than the urban population. Thus, the role of the state budget in the socio-economic development of the country is of utmost importance. Consequently, carrying out of fiscal policy oriented towards improving the social condition of the country is one of the most important issues to improve social-economic development of the country and the well-being of the population.