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Objectives of Public Finance
Objectives of Public Finance
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A nation's growth and development are significantly influenced by its use of public funds. A nation can benefit in multiple ways, both domestically and internationally, from public funds that are well managed. As a result, an approach to managing a nation's public funds that has an impact on all economic stakeholders is known as "Public Finance”. The management of a nation's revenue, debt, and expenditures by various governments and quasi-government institutions is referred to as public finance. The country gets its money from a variety of sources, including taxes and returns on investments.
Healthcare and medical facilities, employee salaries, technological advancements, and other government expenditures are among them. The public plays a significant role in a nation's growth and development; thus the name "Public Finance”. The management of a country's revenue and expenditures at all stages where the public is involved is known as public finance. The state and central levels are where public finance takes place. Furthermore, the nation's economy is dependent on the efficient use of its finances, so the management of public finances plays a significant role in its growth. The primary goals of Public Finance are as follows:
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1. Meeting the requirements of the people - The management of the public's fundamental needs, such as food, healthcare, housing, education, and infrastructure, is the primary goal of public finance. It helps the economy grow and develop when public needs are met in a timely manner.
2. Economic development - Economic growth is a byproduct of good public finance management, which ultimately contributes to the expansion of the nation.
3. Lessens Inequality - Another important goal of Public Finance is to make sure that resources are used effectively to reduce inequality.
4. Establish stability in prices - Public Finance regulates inflation and maintains stability in prices.
In addition, the country's primary requirements are met, employment opportunities are created, and the currency's value is maintained on the global market scenario.
Components of Public Finance
1.Revenue - The primary function of public finance is revenue collection. Furthermore, the government's primary revenue comes from tax collection. Income tax, sales tax, property tax, and other types of taxes are the most common examples. In addition, the government receives funds from import tariffs, duties, and other public revenue services.
2. Expenditure - Infrastructure, healthcare facilities, education, and other areas receive funding from the government. The purpose of the government's expenditures is to benefit society's citizens.
3. Budget - The government's spending plans for a given fiscal year are outlined in the budget.
4. Deficit/Surplus - When the government spends more money than it collects in a given year, it has a deficit while spending less than taxes collected by the government results in surpluses.
5. National Debt - A deficit occurs when spending exceeds revenue collected. To make up for any deficits, the government will borrow money and issue national debt.