Discuss the scope of public finance. In what way does public finance differ from private finance?
The main scope of public finance may be summarised as under:
Public Revenue:
Public revenue concentrates on the methods of raising public revenue, the principles of taxation and its problems. In other words, all kinds of income from taxes and receipts from the public deposit are included in public revenue. It also includes the methods of raising funds. It further studies the classification of various resources of public revenue into taxes, fees, and assessments, etc.
Public Expenditure:
In this part of Government finance, we study the principles and problems relating to the expenditure of public funds. This part studies the fundamental principles that govern the flow of Government funds into various streams.
Public Debt:
In this section of public-finance, we study the problem of raising loans. The public authority or any Government can raise income through loans to meet the shortfall in its traditional income. The loan raised by the government in a particular year is the part of receipts of the public authority.
Financial Administration:
Now comes the problem of organization and administration of the financial mechanism of the Government. In other words, under financial or fiscal administration, we are concerned with the Government machinery which is responsible for performing various functions of the state.
Economic Stabilization:
Now, a day’s economic stabilization and growth are the two aspects of the Government's economic policy which got a significant place in the discussion on public finance theory. This part describes the various economic policies and other measures of the government to bring about economic stability in the country.
BASIS PUBLIC FINANCE PRIVATE FINANCE Aim It deals with revenue and expenditure of the government sector (public sector) It deals with revenue and expenditure of the private sector. Time Period
Public finance is related to one year time period private finance is concerned with daily, weekly and monthly budget, etc. Income vs Expenditure
In public, revenue follows expenditure. In private finance, expenditure follows revenue. Deficit Financing
Govt. can issue new notes. the private sector has no authority to issue new notes. Nature of Budget
In the public sector, the deficit budget is appreciable. In the private sector, the surplus budget is appreciable
The main scope of public finance may be summarised as under:
Public Revenue:
Public revenue concentrates on the methods of raising public revenue, the principles of taxation and its problems. In other words, all kinds of income from taxes and receipts from the public deposit are included in public revenue. It also includes the methods of raising funds. It further studies the classification of various resources of public revenue into taxes, fees, and assessments, etc.
Public Expenditure:
In this part of Government finance, we study the principles and problems relating to the expenditure of public funds. This part studies the fundamental principles that govern the flow of Government funds into various streams.
Public Debt:
In this section of public-finance, we study the problem of raising loans. The public authority or any Government can raise income through loans to meet the shortfall in its traditional income. The loan raised by the government in a particular year is the part of receipts of the public authority.
Financial Administration:
Now comes the problem of organization and administration of the financial mechanism of the Government. In other words, under financial or fiscal administration, we are concerned with the Government machinery which is responsible for performing various functions of the state.
Economic Stabilization:
Now, a day’s economic stabilization and growth are the two aspects of the Government's economic policy which got a significant place in the discussion on public finance theory. This part describes the various economic policies and other measures of the government to bring about economic stability in the country.
| BASIS | PUBLIC FINANCE | PRIVATE FINANCE |
| Aim | It deals with revenue and expenditure of the government sector (public sector) | It deals with revenue and expenditure of the private sector. |
Time Period | Public finance is related to one year time period | private finance is concerned with daily, weekly and monthly budget, etc. |
Income vs Expenditure | In public, revenue follows expenditure. | In private finance, expenditure follows revenue. |
Deficit Financing | Govt. can issue new notes. | the private sector has no authority to issue new notes. |
Nature of Budget | In the public sector, the deficit budget is appreciable. | In the private sector, the surplus budget is appreciable |
