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why do we need to study public finance

The role of public finance is to support a public organisationвs vision in attaining its goals. This means that once a budget has been compiled and funds have been allocated to different departments accordingly,
public finance administrators will ensure that the budget is properly implemented and that expenditure is monitored, while also ensuring that there is no mismanagement of funds. This is the general scope of public finance administration. Here are a few components of that you should know about if you want to work in this field: Budgeting In public finance administration, the task of preparing budgets is an important one. A budget refers to the anticipated income and expenditure of a government organisation. It is a financial plan that makes provision for operational, development, equipment, land, building, salary, and other costs. It is crucial that the financial transactions reflected in the budget are lawful and that there is accurate reporting on how the budgeted funds are spent. В Accounting and auditing Accounting in public finance administration refers to the recording, reporting and analysing of the financial transactions within a government department or public organisation, while auditing deals with examining and scrutinising the financial accounts and statements. There is a close relationship between budgeting and, as it is important to compare the original goals with the actual achievements. The purpose of auditing is then to verify the accuracy of the financial records of the department or organisation.

Purchasing and supply Purchasing and supply are key mechanisms in enabling the government to implement its plans. This part of public finance administration deals with the procurement of goods and services в from the right supplier and at the right quantities. It also deals with the monitoring and distribution of these goods and services to the right places or people at the right times. Along with the above-listed duties, the role of public finance administration also encompasses the following: Safeguarding of public assets An important part of public finance administration is to ensure that public assets в like money, vehicles, equipment and other resources в are protected against misuse. This means putting in place controls and systems to prevent corruption and to promote. These controls ensure that financial transactions are lawful and that resources are used for their intended purpose and in line with the correct processes. Ensuring transparency and accountability Public finance administration requires transparency and accountability. These are important characteristics, because public finance deals with public funds. It is crucial that the people trusted with the responsibility of handling public resources report honestly and accurately on the actual and intended uses of such resources. The role of a public finance administrator is crucial for government and other public organisations to reach their set goals.

People working in this field are responsible for a wide range of duties that help to reach these goals. Working in this field means that you play an important role in ensuring that public funds are spent properly and that the lives of citizens are improved. If you have an analytical mind, love working with numbers, and have an interest in the public sector, this could be a good career choice for you. to start studying public finance administration today. 1. Steady state economic growth: Government finance is important to achieve sustainable high economic growth rate. The government uses the fiscal tools in order to bring increase in both aggregate demand and aggregate supply. The tools are taxes, public debt, and public expenditure and so on. 2. Price stability: The government uses the public finance in order to overcome form inflation and deflation. During inflation it reduces the indirect taxes and genera expenditures but increases direct taxes and capital expenditure. It collects internal public debt and mobilizes for investment. In case of deflation, the policy is just reversed. 3. Economic stability: The government uses the fiscal tools to stabilize the economy. During prosperity, the government imposes more tax and raises the internal public debt. The amount is used to repay foreign debt and invention. The internal expenditures are reduced. During recession, the case is just reversed. 4. Equitable distribution: The government uses the revenues and expenditures of itself in order to reduce inequality.

If there is high disparity it imposes more taxes on income, profit and properties of rich people and on the goods they consume. The money collected is used for the benefit of poor people through subsidies, allowance, and other types of direct and indirect benefits to them. 5. Proper allocation of resources: The government finance is important for proper utilization of natural, manmade and human resources. For it, on the production and sales of less desirable goods, the government imposes more taxes and provides subsidies or imposes taxes lightly on more desirable goods. 6. Balanced development: The government uses the revenues and expenditures in order to erase the gap between urban and rural and agricultural and industrial sectors. For it, the government allocates the budget for infrastructural development in rural areas and direct economic benefits to the rural people. 7. Promotion of export: The government promotes the export imposing less tax or exempting form the taxes or providing subsidies to the export oriented goods. It may supply the inputs at the subsidized prices. It imposes more taxes on imports and so on. 8. Infrastructural development: The government collects revenues and spends for the construction of infrastructures. It has to keep peace, justice and security too. It has to bring socio-economic reformation too. For all these things it uses the revenues and expenditures as fiscal tools.

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