Economics

Unit 3

SYBAF

QUESTION AND ANSWERS

1. EXPLAIN THE MEANING OF PUBLIC FINANCE

ANS.

The economics of public finance is fundamentally concerned with the technique

of rising and dispersion of dollars for the functioning of the government. Thus, the

find out about of public revenue and public expenditure constitutes the principal

division in the find out about of public finance.

But with these two symmetrical branches of public finance, the hassle of business

enterprise of elevating and disbursing of assets additionally arises.

It has also to resolve the query of what is to be performed in case public

expenditure exceeds the revenues of the state. In solving the first problem,

“financial administration” Comes into the picture. In the latter problem,

obviously, the technique of public borrowings or the mechanism of public debt is

to be studied.

Since both public debt as well as financial administration offers upward jab to a

variety of distinctive problems, these are conventionally handled as a separate

branch of the subject.

As such, we have four major divisions (traditionally set) in the find out about of

public finance:

1. Public revenue, which offers with the approach of elevating funds and the

principles of taxation. Thus, within the purview of public revenue, we take up the

classification of public revenue, canons and justification of taxation, the hassle of

incidence and transferring of taxes, consequences of taxation, etc.

2. Public expenditure, which offers with the ideas and problems bearing on to the

allocation of public spendings. Here we find out about the vital concepts

governing the glide of public dollars into exclusive channels; classification and

justification of public expenditure; expenditure insurance policies of the

authorities and the measures adopted for accepted welfare.

3. Public debt, which offers with the study of the motives and strategies of public

loans as nicely as public debt management.

4. Financial administration, under this the trouble of how the financial equipment

is organized and administered is dealt with.