Preliminary Research On Fiscal Capacity Building Of Ethnic Areas In Sichuan

Fiscal capacity of this article is an important dimension to measure the efficiency of public finance, which is reflected in all aspects of financial operations.By analyzing relevant theories, fiscal capacity can be defined as:the ability to meet expenditure needs and organize revenue of local government. Among them, the ability to draw financial resources and to meet the financial needs is the core. Therefore the study of fiscal capacity required from both the revenue and expenditure to reflect.Raising the ability to draw revenue in minority areas, strengthening the fiscal capacity building and excavating the internal mechanism, have important significance not only in Sichuan, on the other remote ethnic areas. Thus the analysis of fiscal capacity connotation and structure helps to understand the real situation within the jurisdiction of the government fiscal capacity, provide the basis for the formulation of the fiscal policy, perform government functions, promote equalization of public services and contribute to the rapid economic development.After the clear meaning of fiscal capacity, we need make empirical analysis about the finance ability of ethnic areas in Sichuan. Article divide local fiscal revenue into three calibers:small, medium and large categories. Different caliber stands for various revenues. Small caliber local revenue refers only to its own fiscal revenue, including local tax revenues and total number of fines; small caliber plus vertical transfer payments is medium caliber of revenue; local fiscal revenue of large diameter is the sum of small, medium, cross transfer payments and local bonds. On the one hand, ethnic areas in Sichuan need a lot of support to protect the livelihood and support the economy, on the other hand, getting rid of the dependent type of financial model is the way of sustainable development. The original intention of the study is to improve the independent fiscal capacity from the region. Therefore, the article chose small-caliber fiscal revenue (R small) to be the index of evaluate local fiscal capacity.Based on the empirical research, we come to three conclusions:the backward development of economy and harsh natural environment are the most important factors which restrict to improve revenue capacity in Sichuan ethnic areas; amounts of expenditure in Sichuan ethnic areas cannot meet the needs of local demands; transfer payments from superior government and other support to give Sichuan ethnic areas are inadequate. For these three issues, we put forward some recommendations to improve the fiscal capacity of the ethnic areas in five dimensions.