role of public finance

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Net neutrality in India
July 24, 2020

It revolves around the role of government income and expenditure in the economy. It has to keep peace, justice and security too. It imposes taxes on items of consumption, the use of which is to be discouraged such as wine, cigarettes, tobacco and bidi, and allows concessions and rebates in taxes if it likes to encourage the consumption of any commodity. An empirical investigation of 56 developing countries is used to assess this role of the government and to evaluate whether it is facilitating or hindering the process of economic development. This branch of economics is responsible for the scrutiny of the meaning and effects of financial policies implemented by the government. Public finance regulates the consumption habits of the people. The government takes necessary action to achieve the plan objectives, through fiscal measures. For it, the government allocates the budget for infrastructural development in rural areas and direct economic benefits to the rural people. The importance of public finance can be justified on the following grounds- (1) Protection to Infant Industries. 6―Act to prevail in certain matters. Abstract This paper focuses on the role of government finance in economic development. The government uses the public finance in order to overcome form inflation and deflation. (3) Regulating Consumption Habits. The major function is to ensure that proper accounting can be given to Parliament. (i) Governments grant Subsidies and grants to various industries these days to enable them to increase the production of different essential items. These subsidies and grants have special place in the Government expenditure of underdeveloped and backward countries. 3. It reduces the burden on export items and also supports them with subsidies and grants. The government uses the fiscal tools in order to bring increase in both aggregate demand and aggregate supply. Therefore, public finance has to play a special role of promoting economic growth in the developing countries besides maintaining price stability. During inflation, it reduces the indirect taxes and genera expenditures but increases direct taxes and capital expenditure. For all these things it uses the revenues and expenditures as fiscal tools. The Role and Function of the Treasury Division. The government uses the public finance in order to overcome form inflation and deflation. envisions the education system of the country to be redefined through active engagement, discussions, required assistance and by bringing the right information to your fingertips. It collects internal public debt and mobilizes for investment. These operations restricting imports and encouraging exports of the Government maintain the balance of trade. During inflation, it reduces the indirect taxes and genera expenditures but increases direct taxes and capital expenditure. For this purpose, there must be policies in the store of the government to encourage people to save more by cutting their wasteful expenditure. It may supply the inputs at the subsidized prices. In simple layman terms, public finance is the study of finance related to government entities. In practice, it can be seen that through tax-policy, Government is able to encourage or discourage the demand on various commodities. The Government can levy Heavy taxes on the richer sections of the society because they have capacity to pay, and spend the income so received on providing various facilities to poorer sections of the society such as providing free medical facilities, educational facilities, cheap housing, Cheap rations through fair price shops etc. The effects of various kinds of public spending and revenue (mainly taxes) are examined. On the other hand, the Government encourages the exports of its surplus production. (adsbygoogle = window.adsbygoogle || []).push({}); Government finance is important to achieve sustainable high economic growth rate. The amount is used to repay foreign debt and invention. (v) Industrial development of a country will bring in more employment opportunities to people especially in under-developed countries. Public finance as a concept may be understood on two levels – 1) as a practical activity of all components of public administration and 2) as a theoretical area. On the reverse, it can have an influential check over infrastructure economic and social activities, mitigate the inflationary and deflationary trends in the economy regulates the consumption and production of unwanted items, and can regulate the flow of imports to protect its own industries and so on. Helps in Increasing Export. Please consider supporting us by disabling your ad blocker, Importance Of Public Finance In An Economy. Public Sector Finance. Promotion of export: The government promotes the export imposing less tax or exempting from the taxes or providing subsidies to the export oriented goods. The Impact Of Democratic Leadership In The Organization, Situational Leadership Model: An Overview on Leadership Flexibility, The Core Leadership Skills You Need in Every Role You Play, Characteristics, Attributes and Traits of Charismatic Leadership, Important Elements to Include in Leadership Development Programs, Understanding The Importance of Executive Coaching, What Are The 9 Canons Of Taxation In Economics, 5 Canons of Public Expenditure | Principles of Public Expenditure, 4 Factors Of Production With Examples And Criticism, Accounting For Annual Leave Journal Entries. It collects internal public debt and mobilizes for investment… Through the help of public policies, the public, expenditure and individual demands can be tempered and turned according to the need of the economy. Public financerefers to the revenue collected by public officials in their official capacities and the way they utilize the money. Public Finance Definition Public Finance is the way of managing the public funds in the economy of the country which plays the most important role in the development and growth of the nation both domestically as well as internationally and it also affects every stakeholder of the country whether that stakeholder is a citizen or not. The government finance is important for proper utilization of natural, man made and human resources. They are expected to pull together and work as a team for the common good of the organization in question. Public financial management systems are now well defined. The internal expenditures are reduced. The Government of an underdeveloped country protects its infant Industries against... (2) Planned Economic Development. The principal of these are the Constitution of the Republic of Trinidad and Tobago (Chapter 8), the Exchequer and Audit Act (Chapter 69:01) and the Pension Act. (4) Reducing Inequalities. (1) Protection to Infant Industries. (5) Maintaining Balance or Trade: The Government always restricts the imports only to the essential items: hence imports of non- essential items are taxed heavily. Public finance helps industrial development of the country as follows-           . Is Democratic Leadership Effective in All Situations? The responsibilities of the Treasury Division emanate from various laws and regulation. Thus, it is evident that the government of a country can push up the industrial and economic development of the country, provide more employment opportunities, encourage investments and savings in the desired direction and increase social benefits through public expenditure.

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