Scope of Public Finance

What is Public Finance?

The government of every country needs to perform certain functions for the betterment of society. Obligatory functions and optional functions are two major types of functions that the government of every country undertakes. Obligatory functions are the functions that are necessary for the government to perform and include, protection of the country from external aggression, internal distortion, maintenance of peace and security, etc. Optional functions are the functions in the absence of which a country can survive. The fund required for such functions is acquired, maintained, and used through the medium of Public Finance. Public finance is the science that deals with the income and expenditure of the public authorities. The public authorities include all types of governments; namely, district, state, and national level governments....

Subject Matter of Public Finance

To understand the concept of public finance, its importance, limitations, doctrine, etc., we first need to study the subject matter of public finance. There are various components studied under public finance, including Public Revenues and Expenditures, Public Debts, Financial Administration, and Fiscal Policy....

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:...

Scope of Public Finance

By the end of the nineteenth century, public finance changed its definition completely. Previously, it was believed that the government spends unnecessarily, and there is no need to make any expenditure from the side of the government. Also, it was considered that the government should not levy taxes on the public to not burden the public with taxes. The principle of individualism prevailed during the nineteenth century, and it was believed that the public should be set free with their finance and that the government doesn’t need to invade into their decisions. But, in the present century, the invasion of government has significantly increased public finance. Expenditure done by the government on education, health, etc., has increased significantly to make society better as a whole. Tax levied by the government on harmful products like cigarettes, alcohol, etc., is also considered valid. The scope of public finance has broadened over time and includes various studies to study the behaviour of government towards income, expenditures, borrowing, budgets, etc. The concept of public finance is studied with the help of-...

Functions of Public Finance

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