The article discusses the problem of forming an effective budget at the regional level. The aim of the study is to establish the reasons for the underdevelopment of the regional budget system and to solve the problem of forming an effective budget system at the level of the constituent entity of the Russian Federation. The study uses a systematic approach of substantiating ways and methods of solving the problem of forming an effective regional budget. It applies general logical research methods and uses methods of generalization, analysis and modeling. The article justifies the role of large and medium-sized businesses in the development of material goods production in the region, since it is the production of material goods that is the main condition for the formation of an effective budget. Particular attention is paid to the nature and forms of small business development in the region. The development of small business should take place in the context of organizing the main vector of economic development, given by large industrial production. The article justifies the proposal to develop a program for the introduction of digital technologies both in the production process itself and in the process of organizing and managing production.. This will result in increasing added value, increasing revenue from the sale of manufactured products and expanding the tax base in the region. Expanding the tax base is the main condition for increasing the efficiency of the regional budget.