Public finance

Meaning of public finance

Nature of public finance

Scope of public finance

Similarity and difference between public and private finance

Function of modern government

Public finance is a compound term of the words public and finance

Public : collection or conglomeration of individual (people taken as whole )

People constituting a public body should have something in common

It still stands for all citizens of the state which may consist of a number of people

Finance : refers to money matters ( revenue , expenditure , debt, payment etc ) and their management

Public finance is called public economics, governmental finance , public sector economic of fiscal
operation of the treasury .

According to gloves public finance is the study of state /government / public authorities or

All sort of local government ranging from small local bodies having very narrow territories jurisdiction
and extremely limited resources to national government commanding larger territories and vast
financial resources.

Public finance is a branch of economics that deals with nature , a principle of revenue and expenditure
of a government and their effects on economic and social system

Public finance is related to financing of the state activities or public finance is a subject which discuss
the financial operation of the fiscal or of the public treasury
Nature of public finance

Has held as a science which deals with the income and expenditure of line government finance

It has been held as study of principles underlying the spending and raising of fund by public authorities

The various theories which form the basis of the collection ;maintenance and expenditure of public
income constitute the subject matter of finance

Scope of public finance

The scope of public finance is not just to study the composition of public revenue and public expenditure
. it covers a full disclosure of the influence of government fiscal operation on the level of overall activity ,
employment, prices and growth process of the economic system as whole

According to Musgrave the scope of public finance embraces the following three function of the
governments budgetary policy confined to fiscal department the

 Allocation branch
 Distribution branch
 Stabilization branch

These refers to three objectives of budget policy i.e the use of fiscal instrument to secure

 Adjustments in the allocation of resources

 Adjustment in the distribution of income and wealth
 And economic stabilization

Public finance is composed of the following constituent public :

 Expenditure
 Revenue
 Debt
 Financial institution