This article is devoted to participatory budgeting. The optimal mechanism of formation of the Commission on the initiative budget which will be engaged in development of items of expenditure of means of the initiative budget and to supervise their proper execution is offered. The possible disadvantages of the introduction of this practice in modern Russian realities are analyzed and it is revealed that the positive aspects in General dominate over the possible costs. The connection of participatory budgeting with the practice of “small business” widespread in the domestic realities and the problem of alienation of citizens from the public authorities, which is extremely relevant for the modern Russian Federation, is determined. It is emphasized that the problem of alienation of power from the population is extremely important in modern Russia, and initiative budgeting has opportunities to bring together the government and the people in modern reality.