A form of government, such as democracy, to whichso seeks the Russian Federation, is impossible without respect for fundamental human rights and freedoms, without the separation of powers, without freedom of speech and many other principles of the rule of law.

To begin with, it is necessary to understand, and what isfederalism and what are its main and budget principles. Federalism is a single system within one state, divided into oblasts, which in part retain their independence in the economic, political, social, cultural and other spheres of society. In other words, each state subject with a federal structure has the right to amend local legislation, as well as to allocate budget funds.

The development of federalism in Russia has a long andthorny path. With the introduction of the Constitution, adopted in the popular vote in 1993, Russia received the status of a federation. Article 5, part 3 of the Constitution of the Russian Federation prescribes the basic principles of federalism. So, the basic principles of federalism are that:

• First, every subject of the federation (the region,autonomous region, region, autonomous region, city of federal significance) has its own legislation and charter. The Republic has a Constitution and local legislation.
• Secondly, there is a division of subjects of reference between the bodies of territorial units of the federation and state authorities.
• Thirdly, despite the size of the territory, all subjects of the Russian Federation have equal, equal rights and a common economic, political, social status.
• Fourthly, the Constitution establishes the principlefederalism, which states that all peoples who live on the territory of the Russian Federation are equal and have the right to self-determination (that is, the right to designate their political status within the state, the cultural and social course of society, to change the territorial form, etc.).
• Fifth, despite the differentiation of the areas of reference between state authorities and bodies of subjects, a unified, integral system of government exists on the territory of the state.

Undoubtedly, the principles of federalism enshrined inArticle 5 of the Constitution of the Russian Federation is necessary for the creation of a democratic state. But if we analyze the contemporary Russian reality with its multiethnic people and a huge territory, the principles of federalism open up a huge number of problems that require immediate resolution (these are equal grants to the subjects of the Russian Federation to support the economy, and infringement of the rights of citizens on a national basis, etc.).

The Constitution of the Russian Federation also sets out the main principlesbudgetary federalism (art. 73). The principles of fiscal federalism mean that each territorial unit of the federation has independence in budgetary activities. But the budgetary activities of the constituent entities of the Russian Federation should not diverge in the principles of implementing a unified state budget policy, goals, tasks and development courses for the economy of the federation as a whole, the implementation of which should come from the federal budget.

The main principle of budgetary federalism in the Russian Federationis that throughout the state there is a single tax and budget system. The unity or integrity of the budgetary system is that, firstly, there is a single monetary system in the federation, and, secondly, the same sanctions are applied for violations of the legislation relating to the budget of the Russian Federation. The second principle of budgetary federalism is the independence of the budgets of the subjects, in other words, territorial units have the right, within the limits of their competence, to implement the budgetary process, legislatively fix tax collections, and develop plans for spending and receiving finances. The third principle is the equality of budgetary rights.