Public Finance
Public sector finance tries to examine the effects and consequences of different types of taxation and expenditures on the economic agents (individuals, institutions, organizations, etc.It is that branch of economics which identifies and appraises the means and effects of the policies of the government.Just as managing finances is a critical function of management in any organization, similarly public finance management is an essential part of the governance process.Rising aspirations of people are placing more demands on financial resources.Public Finance is that part of finance which hovers around the central question of allocation of resources subjected to the budget constraint of the government or public entities.Resource generation, resource allocation and expenditure management (resource utilization) are the essential components of a public financial management system.
The broader term, public economics, and the narrower term, government finance, are also often used.Public finance management includes resource mobilization, prioritization of programmes, the budgetary process, efficient management of resources and exercising controls.At the same time, the emphasis of the citizenry is on value for money, thus making public finance management increasingly vital.Public finance is a field of economics concerned with paying for collective or governmental activities, and with the administration and design of those activities.Public Finance Management (PFM) basically deals with all aspects of resource mobilization and expenditure management in government.Collection of sufficient resources from the economy in an appropriate manner along with allocating and use of these resources efficiently and effectively constitute good financial management.
The field is often divided into questions of what the government or collective organizations should do or are doing, and questions of how to pay for those activities.Public finance also analyzes the effectiveness of the policies aimed at certain objectives and consequently to the development of procedures and techniques for increasing the effectiveness of the policy.