Chapter 1 Flashcards
It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
Public finance
Public Finance is the study of the -
role of the government in the economy.
Public finance is the study of principles underlying the spending and raising of funds by public authorities. This definition is accoring to ?
According to Findlay Shirras
Public finance deals with the provision, custody and disbursement of resources needed for conduct of public or government function. This definition is according to ?
According to H.L Lutz
Public finance is concerned with the income and expenditure of public authorities, and with the adjustment of the one to the other. This definition is according to ?
According to Hugh Dalton
It is concerned with the principles and practices of obtaining funds and spending the same for achieving the maximum social welfare and economic growth in the country.
Public Finance
Nature of public finance
Implies whether it is a science or art or both.
Public finance has been held as science which -
deals with the income and expenditure of the government’s finance.
Public finance studies the relationship between -
facts relating to revenue and expenditure of the government.
3 Arguments in support of Public Finance as Science
1.Principles of Public finance are empirical.
2.Public finance is studied by the use of scientific methods.
3.Public finance is concerned with definite and limited field of human knowledge.
Nature of Public Finance as -
- Science
- An art
- Both a science and art
Fiscal Policy which is an important instrument of public finance makes use of the knowledge of government’s revenue and expenditure to achieve the objectives of full employment, economic development and equality. Price stability etc. To achieve the goal of economic equality taxes are levied which are likely to be opposed. Therefore, it is important to plan their timing and volume.
Public Finance as Art
The study of public finance factual information about the problems of government’s revenue and expenditure can be known. It also offers suggestions in this respect. The study of public finance presents norms or standards of the government’s financial operations . It reveals what should be the quantum of taxes, kind of taxes and on what items less of public expenditure can be incurred.
Public finance is both science and art.
5 scope of public finance
1.Public Revenue
2.Public Expenditure
3.Public debt
4.Financial/Fiscal administration
5.Economic Stabilization and Growth
Public finance not only includes the income and expenditure of the government but also the -
sources of income and the way of expenditure of various government corporations, public companies and quasi government ventures.
Thus, the scope of public finance extends to the study of -
independent bodies acting under the government’s direct and indirect control.
Public finance deals with all those sources or methods through which a government earns revenue. It studies the principles of taxation, methods of raising revenue, classification of revenue, deficit financing etc.
Public Revenue
This studies how the government distributes the resources for the fulfillment of various expenses. It also studies principles that the government should keep in view while allocating resources to various sectors and effects of such expenditure.
Public Expenditure
It deals with borrowing by the government from internal and external sources. At any time, government may exceed its revenue. To meet the deficit, government raises loans. The study of public finance focuses on the problems of raising loans and the methods of repayment of loans.
Public debt
It covers all the financial functions of the government It includes drafting and sanctioning of the budget, auditing of the budget, etc.
Fiscal/Financial Administration