Definitions [1]
Definition: Public Finance
- According to Hugh Dalton: “Public finance is one of those subjects which are on the borderline between economics and politics. It is concerned with the income and expenditure of public authorities and with the adjustment of one with the other.” Since we study the activities of the governments in political science too, public finance also constitutes a part of the study of political science.
- According to Prof. Findlay Shirras: “Public finance is the study of the principles underlying the spending and raising of funds by public authorities.”
Key Points
Key Points: Difference Between Public Finance and Private Finance
| Basis | Public Finance | Private Finance |
|---|---|---|
| Objective | Social welfare | Personal gain |
| Expenditure | Spends first, then raises funds | Earns first, then spends |
| Credit | High credit | Limited credit |
| Currency | Can print money | Cannot print money |
| Elasticity | Flexible | Less flexible |
| Economic Effect | Large impact on the economy | Small impact on the economy |
