Public Finance may simply be defined as the aspect of economics which deals with government revenue and expenditure. In other words, public finance involves the financial activities of government as they relate to revenue or income, expenditure and debt operation and their overall effect on the economy. It is seen as financial activities that concern borrowing and lending, receiving and spending by the federal, state, local governments and their agencies in order to create an impact on individuals and corporate bodies.


Objectives of Public Finance

  1. Revenue generation: Public finance assists the government to achieve an effective and efficient generation of revenue for the nation.
  2. Improved balance of payment: Public finance also helps government in ensuring favourable balance of payment.
  3. Price stabilisation: Public finance helps to ensure the stability of prices of goods and services in order to prevent frequent fluctuations, and other related issues like inflation.
  4. Equitable distribution of income: Public finance also ensures that income accruing to a nation is equitably distributed to various sectors of the economy.
  5. Good fiscal policy: Public finance is used by government to ensure that a good and acceptable fiscal policy is attained.
  6. Provision of employment: Public finance is used to create employment opportunities in the country.
  7. Satisfaction of needs: Public finance is also used to determine the needs of the people to enable government meet those needs.

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