Commerce Mates is a free resource site that presents a collection of accounting, banking, business management, economics, finance, human resource, investment, marketing, and others. Home » Financial System » Importance of Public Finance. The state has to perform number of functions for which money (funds) is required. So to promote equal distribution government need to invest in the development activities for the poor people. In under developed countries like India, Govt. Public finance is required for the development of the state. The government finance is important for proper utilization of natural, man made and human resources. coins. Public finance is a very effective tool used by the government to control inflation and deflation like situations. For ensuring this objective, the government performs a number of activities and needs a huge amount of expenditure. Some of the importance of public finance are as follows-Helps in Removing Inequalities in Terms of Wealth and Income Public Finance: Meaning and Concept of Public Finance! The government basically allocates an efficient amount from the fund raised through different sources for the infrastructural development in rural areas and provides direct benefits to the rural areas. While during deflation government decreases the tax rate bringing down the prices thereby increasing the demand. It is indispensable for its economic development.According to Prof. Nurkse,"Public Finance assumes a new significance in the face of the problem of capital formation in underdeveloped countries." However in the modern day context, public finance has a wider scope – it studies the impact of government policies on the economy. The study of how the government raises its income through different activities and how the government spends this collected income on the expenditure involved in the activities of the community is termed as Public finance. Economics. Thus, public finance deals with the question how the Government raises its resources to meet its ever-rising expenditure. Prof. Dalton in his book Principles of Public Finance states that “Public Finance is concerned with income and expenditure of public authorities and with the adjustment of one to the other”… However ec... COVID-19 is an infectious disease caused by a newly discovered Corona-virus. The rich are getting more and more while the poor are not getting enough and are thereby becoming poorer and poorer. This virus has been named SARS-CoV-2 . I am trying to explain economics in very simple manner. Thus Public Finance studies the income and expenditure of Central, state and local governments for the collective satisfaction of wants and the principles which govern income and expenditure.Here we discuss nature, meaning and scope of public finance. Public finance is the study of the role of the government in the economy. It is simply concerned with and deals with the revenue and expenses of the government.eval(ez_write_tag([[300,250],'commercemates_com-medrectangle-4','ezslot_5',121,'0','0'])); It shows how the government manages its incomes and expenditures for the attainment of its objectives that is the overall development of the community. Students who don't belong to economics background they can also understand by reading my articles. It helps the government in proper allocation and utilization of man-made and natural resources. TO INCREASE THE RATE OF SAVING AND INVESTMENT Most of the people spend their income on consumption. Public Finance plays a dynamic role in a developing countries. When there is more prosperity in the economy and the people are earning more and more, the government increase the tax rate and during deflation government reduces the tax rate thereby increasing the demand. also. Importance of Public Finance Every body realizes necessity of money. The importance of public finance can be justified on the following grounds- (1) Protection to Infant Industries. Public finance is a study of income and expenditure or receipt and payment of government. Public Finance means study of income and expenditure of Central state and local governments and the principles underlying them. eval(ez_write_tag([[300,250],'commercemates_com-large-mobile-banner-1','ezslot_6',172,'0','0'])); Government generates its incomes through the collection of taxes from the general public using various public amenities and government uses these funds in the development and betterment of these public amenities. The importance of money is too much not only for individual but for state (Govt.) I make this blog for providing knowledge of economics theories and economics concept which i am reading in my degree. It revolves around the role of government income and expenditure in the economy. It has a very important role in achieving objectives like full employment and price stability. In order to control inflation, the government increases the tax rate and capital expenditure. The per capita income and savings are extremely low in such countries. It deals the income raised through revenue and expenditure spend on the activities of the community and the terms ‘finance’ is money resource i.e. In order to allocate resources properly, the government imposes more and more taxes on the less demandable goods and imposes a low rate of taxes and even provides subsidies on more desirable products and services.
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