State intervention in the economy is an objective necessity due to the imperfections and limitations of the market mechanism. It is implemented through various forms of State regulation, including both administrative and economic measures, as well as through State business activities.

To manage economic processes, the state applies a set of macroeconomic policy instruments, including monetary, monetary and financial policies. Financial policy, in turn, is a system of measures of state influence on the national economy through the financial system, the key element of which is public finance.

Public finance as an economic category includes two interrelated components: government revenues and government expenditures. State revenues are the aggregate of revenues to centralized funds generated from tax and non-tax revenues, while State expenditures are the process of allocating and using these funds to fulfill State functions and obligations.

The main instruments of financial policy are government revenues, government expenditures, and the balance of government cash flows. Their effective management makes it possible to ensure macroeconomic stability, stimulate economic growth, and solve socio-economic problems facing the state.

Government expenditures can be structured differently depending on the approach to classifying them. They can be considered as:

- total expenditures of the state budget, extra-budgetary funds and expenses related to the state's lending activities;

- expenditures carried out at all levels of government.

Key areas of government spending are purchases of goods and services, as well as transfer payments.

Government purchases of goods and services represent an important component of aggregate demand, along with private sector spending. Their volume directly affects the macroeconomic dynamics, contributing to the regulation of economic growth, employment and production capacity.

Transfer payments are one-sided gratuitous payments aimed at providing social insurance, supporting the poor and fulfilling other social obligations of the state. Such expenditures are usually financed through extra-budgetary funds and redistributed in favor of the population, which contributes to the formation of its consumer demand – one of the components of aggregate demand.

Since transfer payments do not have a direct impact on output, but only redistribute available resources, they are not considered as a tool for regulating economic activity in the framework of financial policy.

Unlike transfers, government purchases of goods and services are actively used to manage aggregate demand, which allows us to correct economic imbalances. Their change leads to the following macroeconomic effects:

- increased public procurement encourages the growth of aggregate demand, which contributes to increased economic activity and production expansion;

- reducing public procurement reduces aggregate demand, which can be used to contain inflation or prevent the economy from overheating.

Thus, public spending, especially purchases of goods and services, is an important financial policy tool that can influence macroeconomic dynamics, ensure stability, and stimulate economic growth.

State revenues as an instrument of financial policy play a key role in ensuring the stable functioning of the national economy. Depending on the approach to the structure of public finances, they can be considered as:

- the aggregate of state budget revenues, extra-budgetary funds and revenues related to the state's lending activities;

- income received at all levels of government.

The main part of state revenues is made up of taxes, which are an independent economic category. They express a special form of economic (monetary) relations that arise in the process of forming centralized financial resources through mandatory and gratuitous payments from individuals and legal entities.

Taxes perform an important function of redistributing national income, since their withdrawal from the income of economic entities allows you to direct financial resources to finance public goods, social programs, and public investment.

In their economic essence, taxes are mandatory payments made by economic agents in exchange for public services provided by the State. The state, which has a monopoly on the provision of most public goods and services (such as defense, law and order, basic education, health care, etc.), determines their value through the tax system, setting tax rates and the tax base.

One of the principal features of taxes is their compulsory nature, which is due to the monopoly position of the state in the provision of public services. Taxpayers are required to make payments regardless of their agreement with the amounts charged or the level of services provided.

The amount of tax revenues should correspond to the needs of financing public expenditures. In the case of under-production of public goods, the tax burden should be reduced, and with the expansion of state functions, it should increase.

Taxes play a key role in the formation of state revenues, ensuring the stable functioning of the economy and the implementation of state obligations. Their functions can be divided into fiscal, regulatory and incentive, each of which has its own specifics and mechanism of action.

The fiscal function is the primary and primary function of taxes. Its essence is to provide the state with the necessary financial resources to fulfill its tasks. The revenue side of budgets of all levels, including the state budget and budgets of extra-budgetary funds, is formed at the expense of tax revenues.

The economic content of the fiscal function is to ensure that tax revenues are sufficient to finance public expenditures, such as maintaining the state apparatus, defense and national security, implementing social programs, supporting basic science and education, and developing national culture and infrastructure.

In addition to the fiscal role, taxes perform regulatory and incentive functions that are interrelated and are aimed at mitigating the cyclical nature of economic development and maintaining sustainable growth. The regulatory function is focused on macroeconomic processes and is aimed at maintaining economic proportions, managing aggregate supply and demand, investment activity and employment levels. The incentive function acts at the microeconomic level, creating conditions for the development of individual industries and business entities through tax incentives, preferences and tax incentive mechanisms.

The main tools for implementing the regulatory and incentive functions of taxes include changes in tax rates, the introduction of tax incentives and preferences, the use of tax credits and deferred payments, the application of penalties and increased rates to curb undesirable economic processes.

Through the tax system, the state manages the level of aggregate supply and demand, investment and savings, the scale and pace of economic growth, and capital accumulation in various sectors of the economy.

Thus, taxes not only provide financing for state functions, but are also an important tool for state regulation of the economy, contributing to macroeconomic stability, investment activity, and socio-economic development of the country.

Economic instruments are measures aimed at regulating economic activity, creating favorable conditions for business, and ensuring macroeconomic stability. The main ones are:

- monetary (monetary and credit) policy. Control the volume of money supply in the economy, regulate interest rates, and control the rate of inflation. The National Bank may change the key rate, conduct operations on the open market (purchase and sale of securities), and use reserve requirements instruments to influence the liquidity of the banking system;

- antimonopoly regulation. МIAS to limit monopolistic practices, including controlling mergers and acquisitions, prohibiting cartel collusions, and preventing abuse of a dominant market position. Such measures promote competition and lower prices for consumers;

- state regulation of prices. And the use of mechanisms for setting minimum and maximum prices for essential goods, housing and utilities services, transport and medicines. This is necessary to protect vulnerable segments of the population and prevent price spikes.

- support for small and medium-sized businesses. Implementation of subsidy programs, provision of concessional loans, tax holidays and grants for entrepreneurs. The state can also introduce state order programs to support national producers.

- industrial policy. Stimulating the development of priority sectors of the economy, such as the IT sector, high technologies, and the agro-industrial complex, through the provision of subsidies, tax incentives, and other forms of state support;

- regional policy. The Ministry of Economic Development of the Russian Federation is responsible for equalizing the socio-economic development of regions, including investment programs, the creation of free economic zones, infrastructure development, and support for economically backward territories.

Thus, the state uses a wide range of financial and economic instruments to achieve sustainable economic development, maintain social stability and increase the competitiveness of the national economy. Financial and economic instruments of public policy play a key role in regulating the economy, ensuring macroeconomic stability and stimulating growth. Effective use of these tools contributes to the development of the state, improving the quality of life of the population and strengthening the competitiveness of the national economy in the international arena.