Dalton defined the subject as one which concerns itself with the income and expenditure of public authorities and the adjustment of one to the other. It is learnt that the study of the subject chiefly centres round different aspects of government revenues and government expenditure in relation to the state’s economy and people.
Professor Bastable, an English economist defines public finance as a subject that deals with expenditure and income of the public authorities of the state. Both the aspects (income and expenditure) relate to the states financial administration and control.
Shirras thinks that public finance is the study of the principles of spending and rising of funds by public authorities. In the context of welfare economics, the modern writers are concerned with the ideals of welfare maximisation. U.K. Hicks points out that there is a great necessity of state participation in production and distribution in the society.
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According to her some goods and services needed by the people cannot be supplied by the market sector. For provision of such goods and services for collective satisfaction of wants, the necessity of governing bodies is highly significant.
Usually, public finance is the fiscal science. ‘Fise’ implies public treasury. So Philip E. Taylor says that public finance is a study of taxation, public expenditure, public debt management etc.
R.A. Musgrave says,
“The complex problems that centre on the revenue-expenditure process of government is traditionally known as public finance.”
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Thus, from the above definitions we knew that public finance is a study of the activities concerning to income and expenditure of the government. As we know, public authorities include central government, state government, local governing bodies (like municipalities, gram panchayats) etc.
Public authorities undertake activities for individuals living within an administrative territory. Finance usually means income and expenditure. So public finance means income and expenditure of the public authorities and adjustment of one to the other. So we knew that:
1. When we talk of public we mean public authorities;
2. Public authorities include central government, state government and local governing bodies.
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3. When we talk of finance, we mean income and expenditure;
4. Public finance is the fiscal science which implies the science of public treasury.
5. So public finance is a study of income and expenditure of the public authorities and adjustment of one to the other.
6. Objectives of public finance (objectives like higher growth, better distribution of wealth, income, property, economic stability etc) can be secured through taxation, public expenditure, public debt management fiscal federalism and fiscal administration. Public revenue, public expenditure, public debt management, fiscal administration and fiscal federalism are the main branches of public finance.