Innovation in local budget management of the Red River Delta provinces

Propose directions and solutions to continue innovation to promote the role of tax tools in macroeconomic regulation. These solutions have an impact on the revenue of the state budget and local budgets when implemented and are studied at the macro level.

The work "State Budget Innovation" by Tao Huu Phung and Nguyen Cong Nghiep, published by the Statistics Publishing House, Hanoi, in 1992, outlined the general perceptions of the State Budget, evaluated current State Budget policies and proposed solutions to innovate the State Budget for effective use in the process of economic innovation of the country. Up to now, some solutions have been effectively implemented in practice.

" State budget in the development of commodity economy in our country today ", the Associate Doctor of Economics thesis of author Tran Van Ngoc in 1997, analyzed many contents related to the State budget associated with commodity development in our country in the early years of the renovation period. The highlight of this thesis is to examine the relationship between the State budget and commodity development, present the factors that determine the scale of the State budget, and limit the benefits between the State and other entities in the revenue and expenditure of the State budget. The content of the thesis has provided a lot of useful information for research to solve the problems of commodity development.

The work " Financial policy of Vietnam in the conditions of economic integration " edited by Associate Professor, Dr. Vu Thu Giang, National Political Publishing House, published in 2000. The basic content of this work refers to the advantages and challenges for Vietnam in the process of regional and international economic integration; the current state of our country's financial policy in the integration process, including: tax policy, foreign direct investment policy, exchange rate policy and interest rate policy in the integration process, positive aspects and limitations of the policy; requirements for financial policy in the integration process; recommendations and key solutions to reform financial policy for Vietnam to successfully participate in integration, while at the same time setting

sets out the main conditions for successful integration. This work partly clarifies the impact on revenue sources and state budget spending needs when our country participates in international economic integration.

- Some solutions to improve the efficiency of centralization, management of state budget revenues and control of state budget expenditures through the State Treasury in Ho Chi Minh City - Scientific research topic at the industry level by Dr. Nguyen Thanh Duong, State Treasury of Ho Chi Minh City, completed in March 2001. The topic assessed the current situation and proposed solutions to improve the management mechanism of state budget funds in the area and the state budget fund in general to suit practical requirements. However, in 2002, Vietnam passed the revised Budget Law, so timely practical research and surveys are needed as a basis for adjustments and orientations in policy making and practical direction.

- Perfecting the management of state budget revenue through the State Treasury in Hanoi. Master's thesis in economics by Dang Van Hien - 2004. The thesis clarified the current situation and proposed a number of solutions to effectively manage state budget revenue in Hanoi. However, the topic has only surveyed the Hanoi area, without comprehensive analysis and assessment on a national scale, without necessary comparisons between localities and regions to draw out common characteristics as a basis for proposing comprehensive solutions.

Promoting the role of the state budget - contributing to the development of Vietnam's economy - Doctoral thesis by Nguyen Ngoc Thao - Hanoi 2007. The thesis clarified the role of the state budget; proposed innovations in linking the role of the budget with innovation in economic management mechanisms, shifting the economic structure towards industrialization and modernization.

Improving the effectiveness of coordination in collecting state budget revenue between Tax, Customs and State Treasury agencies. Nguyen Huu Hiep, Treasury Management Magazine

National, No. 33, March 2005. The article mentioned the coordination of state budget collection work between collection agencies and the State Treasury. However, issues of coordination at a higher level such as via wide area networks, consolidation of state budget collection accounting, have not been systematically mentioned.

Most of the above research works and articles focus on macro-financial policies and state budget management in general or state budget management in a single locality. Currently, there is no research work that fully and systematically studies the management of state budget revenue and expenditure in a region or area.

For that reason, the author has chosen the topic of "Innovation in local budget management of the provinces in the Red River Delta". This is a new topic and does not overlap with published works.

7. Contributions of the Thesis

First: Systematize and clarify theoretical issues on state budget management, local budget management, and factors affecting local budget management.

Second: Analyze and evaluate the current status of local budget management in the provinces of the Red River Delta; evaluate the achieved results, limitations, and analyze the causes leading to limitations in local budget management in the provinces and cities of the Red River Delta in recent times.

Third : Proposing solutions to continue innovating local budget management in the Red River Delta provinces until 2020.

CHAPTER 1

THE BASICS

ON LOCAL BUDGET MANAGEMENT

1.1. Local budget - A component of the State budget

1.1.1. Overview of the state budget

1.1.1.1. Concept and characteristics of state budget

The state budget is an economic and historical category closely linked to the formation and development of the State and of goods and money. The State, as a powerful agency that maintains and develops society, often stipulates compulsory revenues that social subjects must contribute to ensure spending on the state apparatus, army, police, and education. Through many stages of development of social regimes, many concepts of the state budget have been mentioned from different perspectives.

The State budget is a legislative document or a law containing or accompanied by a list of estimated revenues and expenditures for a certain period of time, a model that legislative, executive and dependent administrative agencies must follow [32, p. 9].

The State budget is the annual financial revenue and expenditure plan of the State approved according to legal procedures [53, p. 659].

The State budget is an annual balance sheet of revenue and expenditure for State government agencies [40, p. 282].

In terms of form, these concepts have certain differences, however, they all reflect the plans and estimates of revenue and expenditure of the State for a certain period of time with the form of expression being the State's centralized monetary fund and the State uses that centralized monetary fund to cover expenditures including: expenditures for the operation of the State apparatus; expenditures for national security and defense; expenditures for social security, etc.

In Vietnam, the State budget is stipulated in the State Budget Law as follows: "The State budget is all revenues and expenditures of the State that have been decided by competent State agencies and implemented within one year to ensure the performance of the State's functions and tasks" [12].

Through research, the author completely agrees with the concept of state budget as stipulated in the State Budget Law above.

1.1.1.2. The role of the state budget

There are times when the State often manages the economy by administrative orders and ignores basic economic laws. Such intervention does not allow the economy of that country to develop and the result is economic stagnation, bureaucracy far from development reality, and unstable social order. State intervention in countries today is to respect basic economic laws, market laws, thoroughly use financial and monetary tools, policies and other tools to impact the economy and promote economic development. Among the above tools, the especially important tool that is always used is the State budget.

The State budget plays a role in mobilizing financial resources to ensure State expenditures, helping the State have enough power to control and regulate the market, ensuring major balances of the economy; The State budget is a tool that has a strong impact on the innovation of a country, bringing that country quickly towards its planned goals.

In terms of economy, the State budget plays a role in regulating the balanced development of the economy among sectors, regions and territories, limiting the shortcomings of the market mechanism against monopoly, price-raising or unfair competition that harms the economy as a whole. The State budget also allocates another part to invest in public service enterprises and enterprises necessary for people's livelihood; the State budget has ensured a reasonable source of funding for investment in infrastructure construction, creating a favorable environment and conditions for the formation of enterprises in key sectors, economic groups, corporations, and enterprises under the

Other economic components are born and develop. Tax policies are also a sharp tool to orient investment. They have the effect of restraining or stimulating production and business, export or import, affecting the total supply and total demand of the economy and regulating the economy according to the direction of the State.

In terms of society, the State budget is allocated to all areas of State regulation. The volume and results of management and use of this source of funding also determine the success of social policies. In solving social problems, the State also uses tax tools for regulation, and direct and indirect taxes other than the above purposes also have the effect of guiding reasonable consumption.

State budget funds are spent on important state projects such as economic projects, cultural projects, education and training projects, scientific projects... in form, they are consumption projects but in essence, they are long-term investments to ensure social development in the future, on par with the requirements of integration and development, so the state budget plays a very important role in society.

Regarding the market, the state budget plays an important role in implementing price stabilization. The use of financial funds and financial spending policies at each time help limit the amount of cash in circulation, contributing to curbing inflation.

1.1.1.3. State budget organization

Since the existence of the state and the state budget, countries around the world have had their own methods of using the state budget as a macro-regulatory tool, maintaining the existence and development of the state. The state budget is always associated with the birth of the state, in accordance with the state organization model and the constitution and laws. Countries have divided the budget into the central budget and the local budget (lower level). The division of the central budget and local budget in some countries is as follows:

In (France, Italy, Japan, UK) the state budget system is organized into two levels: the central budget and the budgets of local governments.

In (USA, Germany, Canada, Switzerland...) the state budget system is organized into three levels: Federal budget; State budget; Local budget.

Federal budget

State budget

Local budget

Diagram 1.1: The budget system of the US; Germany; Canada

The French Republic is divided into four levels in accordance with its administrative structure: the State budget (central budget), regional budget, provincial budget, and communal budget. Although the budget levels are relatively independent, in terms of revenue and expenditure management, they must comply with a unified mechanism as prescribed by law.

In China, each level of government is a budget level, and the state budget organization system is built with 5 levels: Central; province (autonomous region, city directly under the government); city under the region (autonomous prefecture); district (autonomous county, city not under the region, city directly under the city); commune (ethnic commune, town).

Central budget


		Provincial Budget (Autonomous Region, Provincial City)


		City in the region (Autonomous Prefecture)
	State budget


		County (autonomous county, city not in region)



		X) (x) ethnic group, town)

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Figure 1.2: China's budget system

In the state budget system of countries, the central budget is assigned to control most important revenues and expenditures; local budgets are assigned to

responsible for local revenues and expenditures. In countries, the budget of each level of local government (state, region, province, district, commune) is assigned specific revenue sources and expenditure tasks.

Budgets at all levels in countries are managed by governments at all levels and local authorities according to decentralization. Corresponding to each level, there are specialized agencies under the government and local authorities participating in management according to prescribed functions and tasks. These agencies have their own organizational structure and certain authorities. These agencies are responsible for advising governments at all levels on long-term strategies and related policies and regimes serving management work. At the same time, they are also specialized agencies responsible for implementing and executing strategies and policies when approved by competent authorities. According to this model, at the central level there are usually ministries, at the local level there are usually state, regional, provincial, district and commune agencies.

In Vietnam, the organization of the state budget system is also consistent with the organization of the state apparatus. According to the constitution, each administrative level has a separate budget level to provide material means for that government to perform its functions and tasks in the territory. The current state budget system includes the central budget and the budgets of local governments (NSDP), in which NSDP includes:

State budget

Provincial and centrally-run city budgets (collectively referred to as provincial budgets). District, county, town, and provincial city budgets (collectively referred to as district budgets). Commune, ward, and town budgets (collectively referred to as commune budgets).

Provincial budget

District budget

Medium budget

nursery

Local budget

Ward budget

Diagram 1.3: Vietnam's budget system

Innovation in local budget management of the Red River Delta provinces - 2

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