Question

explain the subject matter and scope of financial administration.

Answer 1

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Subject Matter of Public Finance:

☆The economics of public finance is fundamentally concerned with the process of raising and dispersion of funds for the functioning of the government.

☆Thus, the study of public revenue and public expenditure constitutes the main division in the study of public finance.

☆But with these two symmetrical branches of public finance, the problem of organisation of raising and disbursing of resources also arises.

☆It has also to solve the question of what is to be done in case public expenditure exceeds the revenues of the state.

☆In solving the first problem, “financial administration” comes into the picture.

☆In the latter problem, obviously, the process of public borrowings or the mechanism of public debt is to be studied.

☆Since both public debt as well as financial administration gives rise to a number of special problems, these are conventionally treated as a separate branch of the subject.

As such, we have four major divisions (traditionally set) in the study of public finance:


1. Public Revenue, which deals with the method of raising funds and the principles of taxation. Thus, within the purview of public revenue, we take up the classification of public revenue, canons and justification of taxation, the problem of incidence and shifting of taxes, effects of taxation, etc.

2. Public Expenditure, which deals with the principles and problems relating to the allocation of public spendings. Here we study the fundamental principles governing the flow of public funds into different channels; classification and justification of public expenditure; expenditure policies of the government and the measures adopted for general welfare.

3. Public Debt, which deals with the study of the causes and methods of public loans as well as public debt management.

4. Financial Administration, under this the problem of how the financial machinery is organised and administered is dealt with.

The Scope of Public Finance:

●The scope of public finance is not just to study the composition of public revenue and public expenditure.
● It covers a full discussion of the influence of government fiscal operations on the level of overall activity, employment, prices and growth process of the economic system as a whole.

According to Musgrave, the scope of public finance embraces the following three functions of the government’s budgetary policy confined to the fiscal department:

(i) The Allocation Branch,

(ii) The Distribution Branch, and

(iii) The Stabilisation Branch.


These refer to three objectives of budget policy, i. e., the use of fiscal instruments:

(i) To secure adjustments in the allocation of resources,

(ii) To secure adjustments in the distribution of income and wealth, and

(iii) To secure economic stabilisation.

Thus, the function of the allocation branch of the fiscal department is to determine what adjustments in allocation are needed, who shall bear the cost, what revenue and expenditure policies to be formulated to fulfill the desired objectives.

The function of the distribution branch is to determine what steps are needed to bring about the desired or equitable state of distribution in the economy and the stabilisation branch shall confine itself to the decisions as to what should be done to secure price stability and to maintain full employment level.

Further, modern public finance has two aspects:

(i) Positive aspect and (ii) Normative aspect. In its positive aspect, the study of public finance is concerned with what are sources of public revenue, items of public expenditure, constituents of budget, and formal as well as effective incidence of the fiscal operations.

In its normative aspect, norms or standards of the government’s financial operations are laid down, investigated, and appraised. The basic norm of modern finance is general economic welfare. On normative consideration, public finance becomes a skillful art, whereas in its positive aspect, it remains a fiscal science.

Hope it's help you! ! !

Answer 2

The subject matter and scope of financial administration.

Explanation:

• The financial administration are those activities that relate to making money available to the diverse branches of the office or any organization to enable it to carry out its objectives.

• It concerns the raising of the public revenues, allocation of funds, and resources to manage the public assets that ensure the government has enough of money to funds its operations.  

• The objective is to collect, mod distribution of revenues, coordination of revenues of public and end expenditure is a planned way, borrow and debt management, and control the financial affairs.  

• The scope includes the preparation of the estimates, the appropriation of funds, the expenditure control, and accounting, along with the audit, reporting, and reviews.

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• brainly.in/question/6118072 answered by Jahirmandal125.