Concept of public finance

The government of every country has to perform certain specific functions, which can be classified as obligatory functions and optional functions. Depends of the country. The maintenance of peace and security are some example of the obligatory functions of the government. But the provision of education, establishment of hospital building, a park etc. are optional functions of government. To perform all these functions adequately and efficiently, government needs funds. Public finance is that science which deals with the income and expenditure of government.

According to Findlay shirras,”Public finance is the study of the principles, understanding the spending and raising of funds of the public authorities.”

According to Daltan,”Public finance is one of those subject which lie on the borderline between economics and politics. It is concerned with the income and expenditure of public authorities and with the adjustment of one to the others.”

Public finance is both science as well as art. When we study the principles and policies of the government revenue and expenditure that might be the science of public finance but when we study how those principles should be applied to solve the financial problem of the government, public finance becomes an art.