PUBLIC FINANCE B COMII YEAR UNITI Chapter1 Introduction

PUBLIC FINANCE B. COM-II YEAR UNIT-I Chapter-1 Introduction To Publiuc Finance Paper code-C 206 Contents- Meaning, Scope, Importance, Nature of Public Finance

Meaning of public finance Public finance deals with the income and expenditure of public authorities. Public authorities include all sorts of government-Central State and Local. It deals with problems of adjustments of income and expenditure of the Government. The methods of expenditure of public bodies and the income of public bodies as well as borrowings of public bodies are known as operations of public finance.

Definition of Public Finance Prf. Dalton defined public finance as “It is concerned with the income and expenditure of public authorities and with the adjustments of one to another. ”

Scope of Public Finance The scope of public finance deals with both positive and normative science. It now includes with not only the revenue and expenditure process but also the effects of fiscal operations upon the economic and social aspects of the economy. Similarly, value judgement may be involved in the field of borrowing and deficit financing as well as in the satisfaction of social wants and maintaining economic stability. Therefore, it can be concluded that public finance is also a positive and normative science and its scope is widening.

References • Tyagi B. P& Singh. H. P(2015 -16) Public Finance Jai Prakash Nath &Co. Meerut. • Bhatia H. L Public finance (2017)Vikas Publishing • Basu, Kaushik(1997), Analytical. Developmet Economics: The Less Developed Economy Revisted, The MIT Press. • Bird graham (2004)International Finance and the Developing Economies, Palgrave Macmilan. • Bell, Crive (2003), Development Policy as Public Finance, Oxford University Press.

PUBLIC FINANCE B. COM-II YEAR UNIT-I Chapter-1 -Introduction To Public Finance Paper code-C 206 Contents-Meaning, definition and distinction of Private and Public goods

Meaning of Private Goods “Private goods are those goods which yield utility and satisfaction only to the person consuming the goods, it is denied to others , only the person who drinks the cup of coffee for example, benefits from the consumption of that cup of coffee. And the coffee consumed by one person cannot be consumed by any one else. ”

Meaning of Public Goods • A pure public goods is defined as a goods that one person consumption of goods does not reduce the amount available to others, i. e the consumption of a public good is non rival. For example social goods.

Definition of Private Goods • Professor Musgrave said, Private wants are provided for adequately by the market. Thus who do not agree to pay the market price or those who cannot pay for it are excluded from the use of the goods. • It means ability to pay the price of a good, the divisibility of a good, and the principal of exclusion is applicable in private goods.

Definition of Public Goods • Professor Musgrave called public good as social wants and should be satisfied by the government. • Social goods are the goods , the consumption of which is non rival. The same benefits are available to all without mutal interference.

Distinction Between Private&Public Goods • The main points of difference are: • Private goods are rival in consumption. /Public goods are not rival in consumption. • Private goods are provided on market price. Those who did not pay the market price are excluded from their consumption. /The principle of exclusion does not apply to public goods. • The consumers who are unable to reveal their preferences are excluded from their consumption. /All consumers may consume alike. • Private goods are divisible in nature. /Public goods are indivisible in nature.

References • Musgrave and Musgrave –Public Finance in Theory and Practice • Thomas F. Pogue and I. C. Sgontz-Government and Economic Choice. • Taylor P. E- Economics of Public Finance, P. 164 • Bernard P. Heber Modern Public Finance, Richard D Irwin (1967) P. 27 • Dalton, Hugh-Principals of Public Finance 4 th edition P. 1

PUBLIC FINANCE B. COM-II YEAR UNIT-I Chapter -2 Paper code-C 206 Contents-The Principal of Maximum Social Advantage