3. Why to study Public finance?
Public finance can be defined as the study of
government activities, which may include spending,
deficits and taxation. The goals of public finance are
to recognize when, how and why the government
should intervene in the current economy, and also
understand the possible outcomes of making changes
in the market.
4. Public Finance
Applied Economics group
Syllabus
Unit 1- Public finance- Meaning, nature ,Scope and importance, Difference b/w
Public and Private finance, Principle of maximum social advantage, Role of state in
public finance, central and state relationship.
Unit 2- Sources of : taxes, loan,grants,aid-meaning,and types of canons of taxation,
problems of justice in taxation, incidence of taxation, taxable capacity ,impact of
taxation, and tax evasion,charateristic of indian tax systems , defects and steps of
reform
Unit-3 Principle of public expenditure ,principle of public debt and its methods of
redemption.
Effects of public expenditure on production and distribution. Public debt in India ,
debt to GDP ratio,impotance subsidies
Unit -4 Public finance in India :sources of revenue of central and state govt.,
concepts and types of budgets, fiscal deficit ,financing and deficit budgeting
,introduction of fiscal responsibility and budget management act.
Unit -5 Financial institution and marketing : role of RBI, stock exchange, recent
development in financial market, constitution and function of finance
commission, recommendation of latest finance commission, latest budget of
central and mp govt.., main heads of revenue and expenditure of central state govt.
5.
6. In public finance we study the finances of the
Government. Thus, public finance deals with the
question how the Government raises its resources to
meet its ever-rising expenditure. As Dalton puts it,”
public finance is “concerned with the income and
expenditure of public authorities and with the
adjustment of one to the other.”
The objectives of public finance are achieved by
managing and drafting policies pertaining to key areas
such as taxation, management of public revenue and
expenditure, raising and servicing public debt, fiscal
administration at various levels.
7. Public finance is required at all social levels
considering different levels of government,
management and analysis with an eye on key focus
areas:
Financial Management
Revenue Management
Expenditure Management
Fiscal Policy Amendments
Regulatory Changes
Public Debt Management
9. Nature
Public Finance as a science as well as an art
Studies Govt. Finance
It studies about public debt
It talks about the economic condition of the country or economy
Scope of Public finance
1. Public revenue
2. Public Expenditure
3. Public debt
4. Financial Administration
5. Economic Stabilization
10. Difference b/w Public and Private finance
1. Income and expenditure Adjustment in Public and Private finance: the
govt. adjusts the income according to the expenditure budget. The private
sector including individuals and private business adjust their expenditure
according to the income or future estimates.
2. Borrowings in public VS Private finance: The Govt. can borrow from itself
,it can simply go back to the people to ask for loans in whichever financial
asset e.g. bonds, when shortages arise. But individual can’t borrow from itself.
3.Currency ownerships in Public VS Private Finance: The Govt. in change
aspects related to currency. This involves the creation, distribution and
monitoring. But no one in private sector is allowed to create currency, this is
illegal.
4. Present VS Future: The public sector is more involved with future planning
and making long term decisions. These decisions (investments)could includes
building of schools, hospitals etc. But Private sector is involved in making
short and mid term decisions.
11. 5. Objective difference in Public and Private Finance: The public sector’s
main objective is to create social benefit in the economy. Whereas Privet industry
seeks to maximize on personal or profit benefits.
6. Coercion to get revenue: The Govt. can use force to get revenue from
individuals. But Private sector does not have this authority.
7. Ability to make Huge and Deliberate changes: The Public finance has the
ability to make huge decisions on income amount, whereas private sector can
not.
8. Surplus Budget concept: Excess income or surplus budget is a great virtue in
the Private sector, this is however not the case in Public sector.
12. Helps In Removing Inequalities In Terms Of Wealth And Income
Helps In Controlling Inflation & Deflation
Helps In Attaining Economic Stability
Helps In Developing Well Structure & Infrastructure
Helps In Increasing Export
Helps In Encouraging Savings & Investment
Helps In Allocating Resources Properly & Efficiently
Helps In Bringing Balanced Development In The
Economy
Importance of Public Finance
