Importance of Public Finance
In the 19th century, the importance of public finance was not very wide as the government did not intervene in public finance, and the tax imposition was very low. The main aim of the government at that time was to protect the country from internal disorders and external aggressions. But in modern times, the importance of public finance has widened. The government started to intervene in public finance and various strategies have been set up by the government to manage the same. Some of the importance of public finance are:
1. Subsidies and Grants: The government, these days gives subsidies and grants to facilitate industries with monetary support to increase the production of essential goods in the domestic country.
2. Taxation: The government levies taxes on some harmful things as well, like cigarettes and alcohol, which are injurious to health. This practice is considered for the welfare of the public as a whole.
3. Protection of Infant Industries: The domestic infant industries are often provided with protection from foreign industries through tariffs, quotas, and embargoes.
4. Optimum Utilisation of Resources: Public finance puts an effort into optimising the utilisation of resources, which is a major concern of developing and under-developed countries.
5. Employment Opportunities: Public finance also undertakes the goal of increasing the level of employment, especially during the depression. The government has to spend increasing amounts on public works to afford employment opportunities for unemployed people within the country.