Public Finance means study of income and expenditure of Central state and local governments and the principles underlying them. However economists have defined it in a narrow and wide sense.
According to Bastable,"Public Finance deal with expenditure and income of public authorities of the states and their mutual relation and also with the financial Administration and Control." Harold groves define public finance as "a field of inquiry that treats of the income and expenditure of government. In Modern Times this includes four major divisions: public revenue, public expenditure, public debt and certain problems of the fiscal system as a whole such a fiscal Administration and fiscal policy."
Thus Public Finance studies the income and expenditure of Central, state and local governments for the collective satisfaction of wants and the principles which govern income and expenditure. Here we discuss nature, meaning and scope of public finance.
Its principles are in the nature of generalizations which states the cause and effect relationship of different variables like public revenue, expenditure, debt and financial administration.These also form the subject matter of public finance.
Public finance is also an art. It concerned with fiscal policies which influence economic policies and economic structure of the country. All government aim at bringing Social Justice through and equitable financial system.
public undertakings. In public income, we study the canons and principles of taxation, the various direct and indirect taxes and their impact and incidence, the effects of taxation, the problems of tax evasion and avoidance and the measures to solve this problem so as to raise public revenues.
The importance of public finance in an advanced country is to stabilize its growth rate.For this ,the government changes its expenditure and taxation policies to produce good effects and avoid bad effects on national income, production, employment and price. when the prices are falling in a recession, private investment falls. To compensate for the lack in investment and to raise effective demand, output, employment and income the government increases expenditure on public works and social securities programmers through budget deficits, debt repayment and reduction in taxes.
Both Government and individual have similar but limited sources of income. Both earn their incomes.
Thus Public Finance studies the income and expenditure of Central, state and local governments for the collective satisfaction of wants and the principles which govern income and expenditure. Here we discuss nature, meaning and scope of public finance.
Nature of public finance
Public finance is a social science which is concerned with the problems of rising of funds and allocation for the collective satisfaction of wants. Its methods of study are based both on the study of the principles and theories or laws of public finance and on a descriptive and statistical study of the actual operations of government finances.Its principles are in the nature of generalizations which states the cause and effect relationship of different variables like public revenue, expenditure, debt and financial administration.These also form the subject matter of public finance.
Public finance is also an art. It concerned with fiscal policies which influence economic policies and economic structure of the country. All government aim at bringing Social Justice through and equitable financial system.
Scope of Public Finance
Prof. Delton divides the scope of public finance into four categories: public income, public expenditure, public debt, and financial administration.In this scope of public finance is the very important part. So we discuss them as under:-Public income:-
Public income is called public revenue.The main source of public revenue are Texas, fees, fines, special assessment and commercial revenues frompublic undertakings. In public income, we study the canons and principles of taxation, the various direct and indirect taxes and their impact and incidence, the effects of taxation, the problems of tax evasion and avoidance and the measures to solve this problem so as to raise public revenues.
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