Importance (Role) of public finance

There are many different role of public finance some are as follow,

1)Subsidies and grants:

The government these days gives subsidies and grants to different industries to enable them to increase the production of essential goods in the country. These subsidies and grants have special place in the government expenditure of under developed and backward countries. The provisions of subsidies and grants are possible only if governments have sufficient revenue.

2)Discourage the production of harmful goods:

The governments often impose high taxes to discourage the production of harmful goods such as cigarette, alcohol, opium etc. on the one side the governments collect higher revenue by imposing higher taxes on the such goods and on the other side it helps to reduce the consumption of these goods.

3) Protection of infant industries:

The infant industries are often given protection against the foreign competition through the traffic duties, in the backward and under developed countries. The objective of these duties is to enable the local industries survive and grow in the home country.

4) Planned economic development:

Public revenue also renders valuable helps in the planned economic development of the country. For eg, the government of india have raised the to implement the five-year  plan by levying various personal and commodities taxes.

5) Reducing economic inequalities:

Public revenue also plays a vital role in reducing the economic inequalities in the capitalist country. For eg, the government can levy taxes on the richer sectors and spend the income on providing cheap food, cheap housing, free medical aid etc to the poorer sections of the society.