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Public Finance:

 

Definition and Explanation:

 

Public finance, according to the traditional definition of the subject, is that branch of Economics which deals with, the income and expenditure of a government. In the words of Adam Smith:

 

"The investment into the nature and principles of state expenditure and state revenue is called public finance".

 

The earlier economists were perfectly justified in giving this definition of the science of public finance because the functions of the public authorities in those days were simply to raise revenue by imposing taxes for covering the cost of administration and defense.

 

The scope of the science of public finance now-a-days has widened too much. It is due to the fact that modern states have to perform multifarious functions to promote the welfare of its citizens. In addition to maintaining law and order within the country and provision of security from external aggression, it has to perform many economic and commercial functions.

 

Due to the increased activities of the state, there has taken place a vast increase in the expenditure of the public authorities. The sources of revenue have also increased. Taxes are levied not for raising the revenue alone but are used as an important instrument of economic policy.

 

Public finance now includes the study of financial administration and control as well. We, therefore, agree with Professor Bastable when he defines public finance as that:

 

"Branch of economics which deals with income and expenditure of public authorities or the state and their mutual relation as also with the financial administration and control the term public authorities includes ail bodies which help in carrying on the administration of the state)".

 

The study of public finance is split up into four parts; (1) Public Expenditure (2) Public Revenue, (3) Public Debt and (4) Budgeting etc.

Relevant Articles:

Public Finance
Public Finance Versus Private Finance
Public Expenditure
Principles of Public Expenditure
Public Expenditure and National Income
Role of State in Economic Activity
Functions of Modern State
 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance
History of Money

 

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