SUBSIDIES TO LOCAL BUDGETS AS AN INSTRUMENT OF FINANCIAL EQUALISATION

In the article, the subsidies to local budgets as an instrument of financial equalisation, reveal the importance of subsidies to support the vital functions of territorial communities, the notion of reverse subsidy. The goal of the article is development of theoretical and methodological approaches to the problem of subsidies as an instrument of financial equalisation. The object of research is the grant-in-aid as an instrument of financial equalisation. The subject of research are theoretical and practical bases of formation concepts of the grant. Research methods. Theoretical foundations of the concept of subsidies as an instrument of fiscal equalization has been studied by means of the dialectical method, generalizations and scientific abstraction. We also used systemic, structural-functional and factor analysis, a statistical method. The results of the study. Investigated a new paradigm regarding subsidies as an instrument of fiscal equalization, the notion of reverse subsidies, the reverse shows the role of subsidies in the system of inter- budgetary relations in the conditions of decentralization of local governments. The proposed model of reverse subsidies to highly developed regions of Ukraine. Suggestions. It is proved that in conditions of decentralization of local governments requires improved methodology for calculating the level of subsidies for highly developed regions of Ukraine: the level of taxability, the actual revenues of local budgets, the expenditure needs and social ability of the territorial community, which will ensure the objectivity of subsidies.