Finance _Knowledge

                                          FORMULA OF PUBLIC FINANCE :- Public finance refers to the study of how governments raise and spend money to support public activities and services. Here are some important formulas used in public finance: 1. Tax Revenue:    Tax Revenue = Tax Rate * Taxable Base    Tax revenue represents the income generated by the government through various types of taxes, such as income tax, sales tax, property tax, etc. It is calculated by multiplying the tax rate by the taxable base. 2. Budget Deficit:    Budget Deficit = Total Expenditures - Total Revenues    The budget deficit represents the shortfall between a government's total expenditures and its total revenues in a given period. A positive budget deficit indicates that expenditures exceed revenues. 3. Budget Surplus:    Budget Surplus = Total Revenue...

                                             Necessary Of Public Finance:- Public finance is necessary for several reasons. Here are some key reasons why public finance is essential:- 1. Provision of Public Goods and Services: Public finance is crucial for the provision of public goods and services that are essential for the well-being of society. Public goods, such as infrastructure, education, healthcare, and public safety, often require collective funding and cannot be efficiently provided solely by the private sector. Public finance ensures that these goods and services are available to all members of society, promoting social welfare and economic development. 2. Addressing Market Failures: Markets can sometimes fail to allocate resources efficiently or produce optimal outcomes. Public finance enables governments to intervene and correct market failures. For example, wh...

 Advantage Of Public Finance :- Public finance offers several advantages that contribute to the effective functioning of governments and the overall economy. Some of the key advantages include:- 1. Resource Mobilization:- Public finance enables governments to mobilize resources for public goods and services. Through taxation and other revenue sources, governments can generate funds necessary for infrastructure development, healthcare, education, public safety, and other essential services. It ensures a stable and predictable source of revenue for the government to meet its expenditure obligations. 2. Economic Stability:- Public finance plays a crucial role in maintaining economic stability. Governments can use fiscal policy tools, such as taxation and public expenditure, to regulate aggregate demand, manage inflation, and stabilize the business cycle. By adjusting tax rates and public spending levels, governments can influence consumption, investment, and overall economic activit...

  Importance Of Public Finance :- The effective management of public finances results in the overall growth of the country Public financial management also encourages investment through various investment policies and avenues The preparation, implementation, and evolution with the changes in technology and government policies for the development of the economy in general form a  part of the public financial management It helps in maintaining price stability and keeping the inflation in check It also helps in reducing unemployment It is also crucial for allocating human and natural resources.       Functions of Public Finance:- The following points illustrate the most important functions of public finance: Managing public revenue and expenditure by proper utilisation of resources. Establishing price stability and reduce inflation in the economy Providing the public with the necessary infrastructure Spending on public development will lead to the overall developme...

SCOPE OF PUBLICE FINANCE :-  PUBLIC REVENURE:- It deals with the alternative sources of state income. It discusses and analyses comparative advantage and disadvantages of various forms of revenue and the principles which should govern the choice between them. The sources of public revenue is taxation, non-tax revenues, public debt and creation of additional currency claim, deposit, fees, and assessment etc. It deals within the canon of taxation and the taxation is the main sources of public revenue. (A) Taxation includes the various principles governing the choice of tax measures, the problem of incidence of Taxation, the effect of Taxation on the working of the economy.  (B) Non-tax revenue includes dividends and profits from public undertaking, grants, fees, fines, and interest receipts etc. each of them is of significant importance in overall policies of the government in general and in particular.  (C) In the modern governments, the public debt has become an important...

  What is Public Expenditure? Public Expenditure, as the name signifies is the expenses that the government of different levels, i.e. central, state or local bodies, incurs either for its own maintenance or for meeting the common needs of the citizens or for promoting economic and social welfare For Instance : Expenditure to run government effectively by public authority be it expenditure on administrative purposes or for maintenance of law and order in the area. Moreover, the expenditure made to provide public utility services like education, public recreation, public works, public transportation, defence and so forth are some common examples of public expenditure. Also, the government carries out multiple social and economic programmes, projects and schemes for which it incurs public expenditure. This may include:   (1)  Social Security to the public in the form of old age pensions. (2) Economic and social overheads like transportation, communication,    ...

   PUBLIC REVENUE :- Public revenue refers to the income or funds collected by the government through various sources to finance its operations, programs, and services. It is the primary source of income for the government and is used to cover expenditures such as public infrastructure, healthcare, education, defense, social welfare, and other public services. Public revenue can be generated through different means, including taxes, fees, fines, licenses, and other forms of government income. Here are some common sources of public revenue: 1. Taxes: Taxes are a significant source of public revenue. They can be levied on income, sales, property, corporate profits, capital gains, and various other economic activities. 2. Fees and Charges: Governments may collect fees and charges for specific services they provide, such as passport fees, driver's license fees, tolls, parking fees, and licensing fees for businesses. 3. Fines and Penalties: Fines and penalties imposed for violation...

    Component Of Public Finance with diagram :-  The main components of public finance include activities related to collecting  revenue , making expenditures to support society, and implementing a financing strategy (such as issuing government debt). The main components include: Tax collection :- Tax collection is the main revenue source for governments. Examples of taxes collected by governments include sales tax, income tax (a type of  progressive tax ), estate tax, and property tax. Other types of revenue in this category include duties and tariffs on imports and revenue from any type of public services that are not free. Budget The budget is a plan of what the government intends to have as expenditures in a fiscal year. In the U.S., for example, the president submits to Congress a budget request, the House and Senate create bills for specific aspects of the budget, and then the President signs them into law. Read a copy of  2017 Budget of the U.S. gove...

Certainly ! Here a More Detailed Diagram of Pubic  Finance :-                     Public Finance is the overall field of managing government finances. Public Revenue represents the inflow of funds into the government's coffers. Public Expenditure denotes the outflow of funds from the government. Tax Revenue includes funds generated through taxes imposed on individuals and businesses. Non-Tax Revenue consists of income from sources other than taxes, such as fees, fines, and licenses. Borrowing represents the funds obtained through issuing government bonds or taking loans. Direct Taxes are levied directly on individuals' income or businesses' profits. Indirect Taxes are applied to goods and services, such as sales tax or value-added tax (VAT). Please note that this diagram is still a simplification, and there are additional elements and complexities within public finance, such as subsidies, grants, intergovernmental transfers, an...

 Why Necessary Is Public Finance.? Public finance is necessary for several reasons: 1. Provision of public goods and services: Public finance enables governments to provide essential public goods and services that benefit society as a whole. These include infrastructure development, education, healthcare, defense, law enforcement, transportation systems, and environmental protection. Public finance ensures the availability and equitable distribution of these goods and services, which may not be adequately provided by the private sector. 2. Redistribution of income and wealth: Public finance plays a role in redistributing income and wealth in society. Through progressive taxation, social welfare programs, and targeted subsidies, governments can address income inequalities and provide support to vulnerable populations. Public finance helps promote social equity and reduce poverty by redistributing resources to those in need. 3. Economic stabilization: Public finance is instrumental i...

  TYPES OF PUBLIC FINANCE :- Public finance refers to the management of a government's revenue, expenditure, and debt. It plays a crucial role in the functioning of a country's economy and the provision of public goods and services. Here are some types of public finance: 1. Public Revenue: This includes all the sources of income for the government, such as taxes (e.g., income tax, sales tax), fees and charges (e.g., license fees, user fees), fines, penalties, and proceeds from government-owned enterprises. 2. Public Expenditure: This refers to the government's spending on various programs, services, and infrastructure development. It includes expenditures on education, healthcare, defense, infrastructure projects, social welfare programs, and administrative costs. 3. Public Debt: Governments may borrow money to finance their expenditures when there is a deficit between revenue and expenditure. Public debt can take the form of government bonds, treasury bills, or loans from ...

 Features of public finance.;-  Public finance refers to the management of government revenue, expenditure, and debt. It involves the use of various tools and techniques to ensure efficient and effective allocation of resources in the public sector. Here are some key features of public finance: 1. Revenue collection: Public finance involves the collection of revenue through various means, such as taxes, fees, fines, and other charges. The government uses this revenue to fund public goods and services and meet its financial obligations. 2. Budgeting: Public finance involves the preparation and implementation of government budgets. Budgeting includes estimating revenue, allocating funds to different sectors, and setting expenditure priorities based on the government's objectives and the needs of the society. 3. Expenditure management: Public finance focuses on the management of government expenditure. This involves planning, controlling, and evaluating government spending to ens...

Public finance:-  Public finance refers to the field of economics that deals with the financial activities of governments at various levels, such as national, state, and local governments. It focuses on the revenue generation, expenditure allocation, and debt management of the public sector. The primary objective of public finance is to study how governments raise funds to finance their expenditures and to examine the impact of these financial activities on the overall economy. It involves analyzing the sources of government revenue, including taxes, fees, and other forms of income, as well as understanding the mechanisms through which the government allocates these funds to different sectors, such as education, healthcare, infrastructure, defense, and social welfare. Public finance also encompasses the study of public debt and fiscal policy. Governments often borrow money to finance budget deficits or to fund long-term infrastructure projects. Public debt management involves analy...