It turned out to be budgetary: the regions' dependence on subsidies has dropped to a record

The regions' dependence on the center's subsidies dropped to a record level in 2025. The share of these revenues in the total revenue of the subjects decreased to 14.9%, the lowest in six years. Moreover, federal support is not decreasing — there has been a positive effect from the increase in income tax and the change in the progressive personal income tax scale. Business adaptation to new conditions also had an impact. Against the background of the treasury deficit, it is important that regional budgets become more stable and independent, increasing their own revenues. Whether the regions' dependence on the center will continue to decrease is in the Izvestia article.

What is the share of transfers in the total revenue of the regions

Regions are becoming less dependent on subsidies. The share of transfers from the federal treasury in the total revenue of consolidated budgets in the first half of 2025 decreased to 14.9%. This is a record low since 2019. This is stated in the "Comments on Government and Business" of the National Research University of Higher School of Economics (Izvestia has it).

For example, transfers to the Lipetsk Region fell by 37%, Kostroma Region by 31%, and Smolensk Region by 27%. At the same time, receipts for some regions are still increasing. One of the biggest increases was in Moscow — by 62%.

Photo: IZVESTIA/Andrey Erstrem

The Ministry of Finance told Izvestia comparable figures: as of July 1, 2025, the share of inter-budget transfers in the revenues of the consolidated budgets of the constituent entities of the Russian Federation (excluding Baikonur) is already 14.8%. The growth of these transfers as of October 1, 2025, compared to the same period in 2024, amounted to 4%, while tax and non-tax revenues of the regions increased by 9%, they noted.

"Thus, the decrease in the share of transfers is due to the outstripping growth of the regions' own incomes, while the volume of federal support is not decreasing," the Finance Ministry concluded.

The decrease in the share of inter-budget transfers indicates the gradual strengthening of regional financial systems and the ability to generate their own sources of income, said Andrei Glushkin, a member of the council of the Moscow regional branch of Delovaya Rossiya.

— The main reason for this was the increase in corporate income tax and personal income tax revenues against the background of economic growth and business adaptation to new conditions. In addition, after the peak of federal support during the pandemic and the early 2020s, the government has shifted to a more targeted allocation policy. The authorities have focused on infrastructure and investment projects, rather than directly leveling deficits," he said.

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Why is the share of federal revenue declining

A decrease in the share of transfers in total revenues may indicate an increase in the stability of regional budgets, Andrei Glushkin noted. However, the overall effect is heterogeneous: some regions remain dependent on subsidies and will not be able to meet social obligations and capital expenditures without federal assistance.

— The main driver of regional incomes in 2025 is rather the internal economic dynamics, rather than increased federal aid. Therefore, we can talk about a certain stability, although not all subjects, the well-being of many still strongly depends on the decisions of the center," says Vladimir Eremkin, senior researcher at the IPEI Structural Research Laboratory of the Presidential Academy.

Photo: IZVESTIA/Sergey Lantyukhov

The growth of transfers relieves the severity of budget problems for the regions, but deprives them of incentives to create domestic growth points, he also said.

Earlier it became known that in four regions of the Russian Federation (Yaroslavl, Ulyanovsk, Voronezh regions and Dagestan) it is planned to reduce tax benefits and adjust reduced rates on regional and local taxes. It should also help the subjects to solve the problem of lack of funds.

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How the reduction of transfers affects the economy

Reducing the share of federal revenues makes the country's economy more balanced, reducing the burden on the treasury, said Andrey Glushkin from Delovaya Rossiya. This is important in the context of the federal budget deficit, which amounted to 3.78 trillion rubles in the first nine months of 2025.

However, this requires the development of tools for inter-regional alignment in order to avoid widening the gap between rich and subsidized territories, the expert believes.

According to him, it is highly likely that the downward trend in dependence on federal transfers will continue, as the government is betting on stimulating regional economic activity. As well as for the development of the subjects' own incomes through investment programs and tax maneuver mechanisms.

Photo: IZVESTIA/Yulia Mayorova

Federal transfers, especially large ones (for example, for co-financing projects), often arrive in the regions in the second half of the year, closer to the fourth quarter, which may change the situation somewhat, added Vladimir Eremkin from the Presidential Academy.

According to him, the key indicator is a steady increase in the subjects' own tax revenues over the horizon of several years, which will outpace the growth of transfers.

The authorities will allocate 3.4 trillion rubles for inter-budget transfers in 2025, and 3.5 trillion in 2026 and 2027. Federation Council Speaker Valentina Matvienko called for increased transparency and shorter deadlines for bringing funds to the regions. The total public debt of all subjects of the Russian Federation increased by 3.9% in the first half of the year, amounting to 3.27 trillion rubles.