SCOPE OF PUBLIC FINANCE In order to discuss the scope of public finance we present a definition which would be helpful to determine the reality of this subject as a science. According to Prof. Taylor, "Public Finance deals with govt. Finance and govt.finance is concerned with raising govt.revenue and making expenditures. In this way, public finance is concerned with govt. Treasury. If we consider it a science, then it is a fiscal science.The names of the policies of this science are fiscal policies and the names of issues of this science are known as fiscal issues. All this means that public finance is concerned with the finance of state. The scope of public finance is extended to the followings: (1). Govt. Expenditure, (2) Govt. Revenue, (3).Public Debt, and (4).Financial Management. 1. PUBLIC REVENUES: Every govt. Has to make a lot of expenditures.For this purpose it has to raise revenues. The major share of Public revenues is obtained through taxes.Again, govt. Also raises revenue through non-revenue sources like fees and penalties. Thus in the science of Public fiance we study different types of taxes. The principles of taxation, the burden of taxes, and the system of taxes. 2. PUBLIC EXPENDITURES: The revenue which a govt. Raises have to be spent on different items. Thus in public finance we study the principles of making govt. Expenditures. Moreover, it is seen what are the major items of govt. Expenditures. Again, whether the expenditures are diverted to productive fields or non-productive fields.What will be the effects of Public expenditures on the level of income distribution and level of output. 3. PUBLIC DEBT: So often the govt. Revenue are far less than govt. Expenditures. The govt have to make the traditional as well as the welfare type expenditures. In such circumstances, the govt. Expenditures exceed govt. Revenues.Therefor, to meet the situation, govts.depend upon public debt. Thus in public finance we study following regarding public debt. What type of public debt are avaliable to the govts; What will be the rate of interest against such loans; What type of bonds the govt.s have to issue; How the govts. Will repay the debt; Whether the govts. Will get loans directly from the public or indirectly; Whic sources of public borrowing, i.e.,central bank or commercial banks will be more economical; Whether the amounts raised through public debt will be spent on productive fields or non-productive fields. 4. FINANCIAL ADMINISTRATION: Public finance does not mean raising of public revenues, making of govt. Expenditures and issuing of bonds to have public debt. Rather, we study all that mechanism which helps in performing all these activities. It means that in public finance we study financial management. It means that we study how govts. Prepare budgets which are the biggest financial documents consisting of budget estimates, revised estimates and actual estimates of govt.revenues and govt. Expenditures.
