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Objectives: This research aims to develop a new economic model and conceptual directions for increasing the sustainability of regional budgets in the Russian Federation. Methods: The research methodology is based on empirical methods (data collection, study, and comparison), methods of synthesizing theoretical and practical material, and mathematical and statistical analyses. When processing information, methods of systematization and grouping were used. The budgets of the constituent entities of the Russian Federation (BCERF) are the object of this study. The authors proposed grouping and revealed the consequences of the factor actions for the regions, leading to a reduction in income, an increase in the expenses of the BSRF, the need for government borrowing, etc. Findings: Conceptual directions for increasing the sustainability of regional budgets in the Russian Federation were proposed, such as eliminating the practice of subsidies in areas not defined by regulatory legal acts and improving the methodology for distributing subsidies for fiscal equalization, aimed at reducing the risks of underfinancing the expenditure obligations of a constituent entity of the Russian Federation (CERF). Novelty: The scientific novelty of this research includes the presentation of more effective mechanisms for controlling budgetary reserves and increasing the sustainability of regional budgets. Doi: 10.28991/ESJ-2024-08-02-015 Full Text: PDF