Concept of Vertical Fiscal Imbalance in the Analysis of Fiscal Sustainability at the Regional Level

The paper analyzes the concept and indicator of vertical fiscal imbalance (VFI) its capability in assessing creditworthiness (debt sustainability) Russian regions. It is found that VFI does not replace other indicators debt broader sustainability, but complements them by providing diagnostics balance incoming outgoing intergovernmental transfers addition to expenditures revenues (budget deficit). Vertical has a close inverse pair correlation with share own (tax non-tax) capacity, can therefore reflect (along amount capital expenditures). Technically, it advisable carry out an analysis using recalculation accounting for subventions. concluded important element methodology diagnosing sustainability. Further study features concept, as well use regulation relations, suggests promising outlook.