NATURE AND SCOPE OF PUBLIC FINANCE

•    NATURE AND SCOPE OF PUBLIC FINANCE

PUBLIC FINANCE 

•    BY DR. SHASHI AGGARWAL ON THE YOU TUBE CHANNEL SHASHI AGGARWAL ECONOMICS AND LAW CLASSES

•    MEANING OF PUBLIC FINANCE

1.       PUBLIC MEANS : COLLECTIVE TERM WHICH STAND FOR THE COLLECTION OF INDIVIDUALS

2.       WIDER SENSE REFERS TO ALL THE MEMBERS OF A COMMUNITY

3.       THE ORDINARY MEANING OF THE TERM FINANCE IS MONEY RESOURCES

4.       PUBLIC FINANCE THE WORD PUBLIC IS USED IN NARROW SENSE WHERE AS THE WORD FINANCE IS USED FOR IN WIDER SENSE

5.       PUBLIC MEANS A GROUP OF PEOPLE REPRESENTED BY GOVT AND FINANCE MEANS FINANCIAL RESOURCES OR INCOME OR EXPENDITURE OF THE GOVERNMENT OF A COUNTRY.PUBLIC FINANCE IS RELATED TO FISC. FISC MEANS GOVT TREASURY.

•    MEANING

•    PUBLIC FINANCE IS THAT BRANCH OF ECONOMICS WHICH IS CONCERNED WITH THE STUDY OF REVENUE AND EXPENDITURE OF THE PUBLIC AUTHORITIES. IT STUDY HOW THE PUBLIC AUTHORITY RAISE REVENUE AND INCURS EXPENDITURE SO THAT SOCIETY MAY GET MAXIMUM SOCIAL BENEFIT

•    PUBLIC AUTHORITIES REFERS TO DIFFERENT LAYERS OF GOVT OPERATING WITH IN A COUNTRY.

•    PROF DALTON,” SUBJECT WHICH IS CONCERNED WITH THE INCOME AND EXPENDITURE OF PUBLIC AUTHORITIES AND WITH THE ADJUSTMENT OF THE ONE TO THE OTHER.

•    DEFINITION OF PUBLIC FINANCE

•    FINLAY SHIRRAS : PUBLIC FINANCE IS THE STUDY OF THE PRINCIPLES UNDERLYING THE SPENDING AND RAISING OF FUNDS BY THE PUBLIC AUTHORITIES

•    PROF B.P HERBER

•    THE GOVERNMENT MEANS OF ALL ALLOCATION ARE ACCOMPLISHED THROUGH THE BUDGETARY PRACTICE OF TAXING AND SPENDING-----

•    SCIENCE OF PUBLIC FINANCE STUDIES AND ANALYZES THE EFFECT OF GOVERNMENT BUDGETARY PRACTISES OF TAXES AND SPENDING

1.       ALLOCATION OF SCARCE RESOURCES

2.       DISTRIBUTION OF INCOME AND WEALTH

3.       ECONOMIC STABILITY AND FULL EMPLOYMENT

PUBLIC FINANCE IS THE STUDY OF INCOME AND EXPENDITURE OF THE STATE. WE CAN EASILY INFER THAT IT IS OLD AS THE STATE IT SELF

ADAM SMITH THE FATHER OF POLITICAL ECONOMY IS CREDITED WITH HAVING FIRST STARTED A SYSTEMATIC DISCUSSION ON PUBLIC EXPENDITURE.

•    NATURE OF PUBLIC FINANCE

•     WHETHER IT IS SCIENCE OR ART OR BOTH

•     PUBLIC FINANCE IS A SCIENCE:- SCIENCE IS THE SYSTEMATIC STUDY OF ANY SUBJECT WHICH STUDIES CAUSAL RELATIONSHIP BETWEEN FACTS.PUBLIC FINANCE IS A SYSTEMATIC STUDY OF ANY SUBJECT WHICH STUDIES CAUSAL RELATIONSHIP BETWEEN FACTS. THE ARGUMENTS :-

1.       DEFINITE AND LIMITED FIELD OF HUMAN KNOWLEDGE

2.       SYSTEMATIC STUDY OF FACTS

3.       SCIENTIFIC METHODS ARE USED TO STUDY PUBLIC FINANCE

4.       PRINCIPLES OF PUBLIC FINANCE ARE EMPIRICAL

•    PUBLIC FINANCE IS AN ART: ART IS THE APPLICATION OF KNOWLEDGE FOR ACHIEVING OBJECTIVES. FISCAL POLICY WHICH IS AN IMP INSTRUMENT TO OF  PUBLIC FINANCE MAKES USE OF THE KNOWLEDGE OF GOVT’S REVENUE AND EXPENDITURE TO ACHIEVE THE OBJECTIVES OF FULL EMPLOYMENT,ECONOMIC EQUALITY,ECONOMIC DEVELOPMENT AND PRICE STABILITY

•    IS PUBLIC FINANCE A POSITIVE OR A NORMATIVE SCIENCE

•    PUBLIC FINANCE AS A POSITIVE SCIENCE: DURING THE ANCIENT PERIOD,NO WEIGHTAGE WAS ATTACHED TO THE SUBJECT AS THERE WAS COMPLETE ABSENCE OF GOVERNMENT,NO UNIFICATION OF THE PEOPLE AND NO COMMON EFFORTS

•    ALL CLASSICAL ECONOMISTS HAVE A FAITH IN LAISSEZ –FAIRE AND MARKET MECHANISM WITH MINIMUM FUNCTIONS TO BE PERFORMED BY GOVERNMENT

•    THE NEO CLASSICAL ECONOMISTS OF COURSE DO NOT LAY MUCH EMPHASIS ON THE SUBJECT OF PUBLIC FINANCE

•    A SYSTEMATIC STUDY WAS MADE BY PROF BASTABLE

•    DALTON DEFINED AS IT WAS CONCERNED WITH INCOME AND EXPENDITURE OF PUBLIC AUTHORITIES AND WITH THE ADJUSTMENT OF ONE TO ANOTHER

•    MODERN ECONOMISTS LIKE LUTZ,CARE,C PLEHUM,PHILLIPS E. TAYLOR,HAROLD LIROUES ETC DEFINED THE CONCEPT IN TRADITIONAL FASHION.

•    PUBLIC FINANCE AS A POSITIVE SCIENCE

•    AS A POSITIVE ECONOMICS THEY ARE CONCERNED AS TO HOW PUBLIC AUTHORITIES HAVE COLLECTED PUBLIC REVENUE,HOW THEY MAKE PUBLIC EXPENDITURE AND HOW BOTH ARE ADMINISTERED.

•    THEY ARE LEAST INTERESTED TO KNOW THE HOW REVENUE AND EXPENDITURE OF THE PUBLIC AUTHORITY AFFECT OR WILL AFFECT THE SOCIAL AND ECONOMIC ASPECTS OF THE LIFE

•    THE STUDY OF EFFECTS OF FISCAL OPERATIONS OR BUDGETARY PROCESS WERE NOT CONSIDERED AND OUT RIGHTLY REJECTED THE NORMATIVE ASPECTS OF THE SUBJECT.

•    PUBLIC FINANCE AS NORMATIVE SCIENCE

•    AFTER THE GREAT DEPRESSION IN 1929-30,RADICAL CHANGES TOOK PLACE IN THE WORLD ECONOMY

•    J. M KEYNES IN HIS GENERAL THEORY OF EMPLOYMENT,INTEREST AND MONEY HAS GREATLY INFLUENCED THE ECONOMIC ACTIVITIES AND LEVEL OF EMPLOYMENT HAS BECOME AN INTEGRAL PART OF THE SUBJECT OF PUBLIC FINANCE

•    KEYNES SHOWED THAT IT WAS THROUGH FISCAL ACTIVITIES OF THE STATE TO INCREASE EMPLOYMENT AND TO MAINTAIN THE SAME AT THE HIGH LEVEL. SOME ECONOMISTS ACCEPTED PUBLIC FINANCE AS A NORMATIVE SCIENCE. THESE WERE MUSGRAVE,ALLEN,HERBER ,SHIRRAS

•    PUBLIC FINANCE AS NORMATIVE SCIENCE

1.       BROADEN THE SCOPE OF PUBLIC FINANCE

2.       INCLUDE NOT MERLEY REVENUE AND EXPENDITURE PROCESS OF THE GOVERNMENT BUT ALSO THE EFFECTS OF FISCAL OPERATIONS UPON THE FISCAL AND ECONOMIC ASPECTS OF THE ECONOMY.

3.       PUBLIC FINANCE CAN NOT IGNORE THE VERSION OF WHAT OUGHT TO BE

4.       WHICH EVEN NEO CLASSICAL ROBBIN ECONOMISTS AS POSITIVE SCIENCE

5.       PUBLIC FINANCE HAS BEEN RECOGNIZED AS A NORMATIVE OPERATION. FISCAL OPERATIONS ARE USED TO CHECK INFLATION.UNEMPLOYMENT,UNDEREMPLOYMENT,TRADE CYCLE ETC

•    SCOPE OF PUBLIC FINANCE

1. PUBLIC REVENUE
2. PUBLIC EXPENDITURE
3. PUBLIC DEBT
4. FINANCIAL ADMINISTRATION
5. ECONOMIC STABILIZATION

•    SCOPE OF PUBLIC FINANCE

•    THEORY OF PUBLIC REVENUE:

1.       PRINCIPLES OF TAXATION

2.       METHODS OF RAISING REVENUES

3.       CLASSIFICATION OF REVENUE

4.       DEFICIT FINANCING

ALSO KNOWN AS DISTRIBUTION BRANCH

WE STUDY THE PRINCIPLES WHICH SHOULD GOVERN THE PUBLIC REVENUE AND VARIOUS METHODS OF RAISING IT

TAXATION IS THE MAJOR SOURCE OF PUBLIC FINANCE

•    THEORY OF PUBLIC EXPENDITURE

•    THEORY OF PUBLIC EXPENDITURE:-ALLOCATING BRANCH

1.        STUDY THE PRINCIPLES AND PROBLEMS RELATING TO THE EXPENDITURE OF PUBLIC FUNDS

2.       STUDIES THE FUNDAMENTAL PRINCIPLES THE GOVERN THE FLOW OF GOVERNMENT FUNDS INTO VARIOUS STREAMS

3.       CLASSIFICATION OF PUBLIC EXPENDITURE ON DIFFERENT BASES

•    THEORY OF PUBLIC DEBT

•    THEORY OF PUBLIC DEBT:

1.       SOURCES OF DEBT

2.       IMPACT OF BURDEN OF DEBT

3.       METHOD OF INTEREST PAYMENT

4.       REDEMPTION OF DEBTS

GOVERNMENT CAN RAISE INCOME THROUGH LOANS TO MEET THE SHORT FALL IN TRADITIONAL INCOME

ALSO STUDIES THE REASON FOR WHICH THE LOAN IS RAISED,SOURCES OF THE LOAN AND THE METHOD IN WHICH RAISED,THE INTEREST AND METHOD OF REPAYMENT. EXAMINES THE PROBLEM RELATED TO RAISING AND REPAYMENT OF LOANS.

•    FINANCIAL ADMINISTRATION

•    FINANCIAL ADMINISTRATION:- PROBLEMS OF DRAFTING THE BUDGET,ITS ACCEPTANCE AND APPLICATION. FINANCIAL ADMINISTRATION IS CONCERNED WITH GOVERNMENT MACHINERY WHICH IS RESPONSIBLE FOR PERFORMING VARIOUS FUNCTIONS.

1.       BUDGET IS MASTER FINANCIAL PLAN OF THE GOVERNMENT

2.       ANTICIPATED REVENUE AND EXPENDITURE ARE ESTIMATED

3.       THE IMPORTANT MATTER IN FINANCIAL ADMINISTRATION IS THE EXECUTION OF THE BUDGET

4.       FINANCIAL ADMINISTRATION COVER : PREPARATION OF THE BUDGET,PRESENTATION,PASSING OF THE BUDGET,EXECUTION AND EVALUATION OF THE BUDGET

•    ECONOMIC STABILIZATION

•    STABILITY AND GROWTH ARE THE TWO ASPECTS OF THE GOVERNMENT AND VARIOUS ECONOMIC POLICIES AND OTHER MEASURES OF THE GOVERNMENT TO BRING ABOUT ECONOMIC STABILITY IN THE COUNTRY.

•    SCOPE OF PUBLIC FINANCE:

1.       ALLOCATION BRANCH

2.       DISTRIBUTION BRANCH

3.       STABILIZATION BRANCH