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PublicFinanceDECO404

PUBLIC FINANCE

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forLovely Professional University

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DLP-7839-286-PUBLIC FINANCE-PUNJABI C5835/012/010Typeset at : M2WMedia, Delhi Printed at : Sanjeev Offset Press, Delhi

(Units) (CONTENTS) (Page No.)

1. (Meaning and Scope of Public Finance) 12. (Principles of Maximum Social Advantage) 253. ()

(Issues Related to Economic Activities of Public Finance) (EXP.) 374. :

(Instrument of Public Finance : Concepts and Role of Budget) 435. :zz

(Public Revenue: Revenue Receipts and Capital Receipts) 506. (Taxation and Its Canons) 617. -(Expediency Theory) 778. -(Socio-Political Theory) 809. :z

(Ability to Pay Theory : Objective and Subjective Indices) 8310. (),-()

(Impact, Shifting and Incidence of Taxation) 9911. -

(Theory of Tax Shifting : Concentration and Diffusion Theory) 10512. (Diffusion Theory) 12013. :

(Classification and Choice of Taxes : Direct and Indirect Vat) 12314. (Effect of Taxation on Production and Growth) 14515. :

(Public Debt : Meaning of Public and Private Debt and its Limitations) 16416. :

(Effect of Public Debt : Public Debt and Economic Growth) 17417. (Public Expenditure) 19818. z(Effects of Public Expenditure) 21419. (Public Budget) 23420. (The Federal Finance) 25121. (Development of Federal Finance in India) 26722. (Indian Finance Commission) 28023.

(Implementation of XIIth and XIIIth Finance Commission) 29524. (Indian Public Debt) 31325. (Indian Tax System) 33026. ..fi(Recommendations of Shri L. K. Jha Committee) 34927.

(Recommendations of Raja J. Chelliah Committee on Tax Reforms) 35428.

(Recommendations of Kelker Committee on Direct and Indirect Tax) 36029. (States Finance) 36630. (Local Finance) 393

(SYLLABUS)

(Public Finance)

(), ()

Objectives The aims of this course are to introduce basic concepts of public finance, particularly in the context of

macroeconomics policies, to the students. This course will provide students relevant theoretical methods to analyze government public finance policies. The course will emphasize on application of advanced macroeconomic to public finance.

Sr. No. Topic

1 Meaning and scope of Public Finance; Principles of maximum social advantage;

Issues related to economic activities of the public sector.

2 Instrument of public finance: concepts and role of budget; Public revenue: Revenue

receipts and capital receipts.

3 Taxation and its cannons; Division of tax burden: Expediency theory.

4 Socio political theory; Ability to pay theory; objective and subjective indices.

5 Incidence of taxes and the effects of a tax, Forward and backward shifting; Theories

of tax shifting: the concentration theory; Diffusion theory.

6 Classification and choice of taxes: Direct and indirect, VAT; Effect of taxation on

production and growth.

7 Public Debt: Meaning of public and private debt and its limitations; Public debt,

economic growth and inflation.

8 Public expenditure: Meaning and nature of public expenditure, Wagners law of

Increasing of state activities; Effects of public expenditure and economic

stabilization; Public budget: Introduction, types.

9 Federal Finance: The rationale and principles; Indian Federal Finance: Historical

background, financial federalism under constitution.

10 Finance Commission: Introduction, rationale.

-A :

1LOVELY PROFESSIONAL UNIVERSITY

-A: (Meaning and Scope of Public Finance)

(Contents)

(Objectives)

(Introduction)

A.A (Meaning of Public Finance)

A.B (Importance and Scope of Public Finance)

A.C (Functions of Modern States)

A.D (Subject-matter of Public Finance)

A.E (Public and Private Finance)

A.F (National Debt)

A.G (Role of Public Finance in National Economy)

A.H (Summary)

A.I (Keywords)

A.A@ z(Review Questions)

A.AA (Further Readings)

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2 LOVELY PROFESSIONAL UNIVERSITY

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A.A (Meaning of Public Finance)

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. , 2

. , , 3

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----z,--,z-

1. It deals with the income and expenditure of Public authorities and with the adjustment of one to another. Dalton

2. The study of the principles underlying the spending and raising of funds public authorities. Findlay Shirras.

3. Public Finance deals with the expenditure and income of Public authorities of the state and their mutual relation as also with the financial administration and control. C. F. Bastable

4. Public Finance then constitutes a study of the monetary and credit resources of the state. J. K. Mehta

-A :


- -,,--- -,,z-

(Public Finance)-(Public Bodies)-(Fiscal or Public Treasury) (Fiscal Operations) (Fiscal Policies),-(Standard of Living)(Money Market)-

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A.B (Importance and Scope of Public Finance)

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(B)

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(Fill in the blanks)

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A.C (Functions of Modern States)

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-(Welfare)-

(a) (Security),

(b) (Justice)

(c) (Coinage)(Weight and Measures)(Regulation)fi(Enterprises)

(d) ,,,

(e) ,,

(f)

(g)

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(Fiscal Policy)fi,fi,fi(Advanced Economy)(Percapita Income),-(Marginal Propensity to Consume),-

,(Equitable Distribution)(Fiscal Policy)

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fiz z-

()

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A.D - (Subject-matter of Public Finance)

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(A) (Public Revenue)-z,-

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(a) -

(b) , z

(c) -

(d) -

(e) zz

(f) -?

(B) (Public Expenditure) - ,-z

(a)

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(c) -

(d) z?z

(C) (Public Debt) -z

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(a) -

(b) z


(c)

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(e) z,zzz,z

(f) -

(g) z

D. z (Financial Administration)-zz-

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(b) --

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(A) (Economic Stabilisation) -(Fiscal Policy),

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H. z

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A.E (Public and Private Finance)

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A.E.A (Similarities)

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(B) (Balanced Budget) -zz

(C) (Borrowing)-

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A.E.B (Dis-Similarities)

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A. (Determination of Expenditure) -(Public Authority)fi-- - z.z(Adjustment)fi,(Public Authority) z-

B. (Compulsory Character)-,fi,zzz,,zfifi(Choice)zz

C. - z (Principle of Equi-marginal Utility)- z-(Marginal utility)z-z......,,,,z

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-fi,fi

D. z (Nature of Budget)-(Surplus Budget)(Deficit Budget)fifi,fiz(Balanced budget)fi

E. z (Nature of Resources) -z-(deficit financing) ,(Public Authority),(Private Transport)z(Coercive method)

F. z (Motive of Expenditure)-zz(Public bodies)z,zzfiz

G. z (Long Term Consideration) - z(Returns)z z,zzz,-(Public Welfare)z(Multipurpose Hydroelectric Projects)zzz,

H. (Coercive Method)-


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I. z (Publicity and Audit Test) - z z-zz

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A.E.C z (Trends in Public Finance)

(General Economic theory)z(Classical Economic Theory)z(Keynes General Theory of Full Employment)

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(Private enterprises)z(Taxation)zzzfifiz,(Private Investment)(Texes)zfi,(Super Tax)zzz(Indirect Taxes)z,z,zz(Inflation)--(Substitute)z-

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() z


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z

fi,(i)(ii)(iii)(iv)(inflation)(Deflation)(v)

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A.E.D (Taxation and Equitable Distribution)

fi,

-A :


fi,,,(Progressive and Direct Taxation)-(Unearned Income)z,()fi,,

A.F (National Debt)

(Dead Weight Debt),,-,,,(borrowings), (Natural Resources)

A.F.A (Activating Finance)

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..(Lerner)

C. (New Trends in Public Finance)-,fifi

(A) (Rechard Musgrave) ,1

(B)(Otto Eckstein),,-,,2

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(A)(B)(C).(Prof. Musgrave)-(Economic Stabilisation)(Distribution of Income)(Resources allocation):-

(a)

(b) - (Positive Science),

D. (Public Finance in Developed and Under-developed Countries)-,,-,,

A.F.B (Developed Countries and Public Finance)

- -

1 An investigation into the principles of public economy, move precisely into the those aspects of economic policy that arise in the operations of the public budget. Theory of Public Finance 1959, Page 3 2 Public Finance in the study of the affects of budgets of the economy particularly the effect on the achievement of the economic objectives-growth stability equality and efficiencyIt is also the study of What ought to be.

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(Arther Smithies)-

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A.F.C (Under-developed Countries and Public Finance)

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-..(A. R. Prest),,z

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A. - ,,(Public Savings)

B. - ,fi

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A.G (Role of Public Finance in National Economy)

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AIC@

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(A)

(B)

(C)

(D)

A. (Importance of Public Finance in Allocation of Resources)-,---,,,

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(ii) (Rate of Population Growth)- ,

(iii) (Development of Backward Areas)-,

(iv) (Development of Public and Private Industries)-z,-(a)(b)-(c)

(v) (Social Security Activities)-,,,z,-

B. (Importance of Public Finance in Distribution of Income and Wealth) - zfi,,,z,-


-,-

(i) (Public Expenditure) -,,-(),(),,()()-

(ii) (Taxation)- -(Income Tax),(Inheritance Tax),,,-,,,

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C. (Importance of Economic Stability)-,,, -

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...,,fi,-

-A :


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D. (Importance in Collection of Resources for Economic Development)-,-

(i) (Capital Formation)--...z,,-

()

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() (Direct Physical Control)- -,

() (Increase in the Rate of Present Taxes)- ,-() ,,,()

() (To Collect the Saving from Public Enterprises) -,

() (Public Debt)--,,


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() (Deficit Budget)-,,-

(i) (Change in Production Structure)- ,fi

(ii) (To Remove the Unemployment)- z,- ,,

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- (Self Assessment)

-(Multiple Choice Questions)

AA.

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A.H (Summary)

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J (Classical Economic Theory), (Keynes General Theory of Full Employment)

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A.I (Keywords)

J (Budget)-,-

J (Fiscal Operations)-

J (Inflation)-

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A. ?

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E.AIC@ F. G.fi H.

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AC.() AD.() AE.()

A.AA (Further Readings)

A. -

B. -..,..

C. -,..,

D. -.B@@I

E. : -.B@@D

F. :.B@AB

G. -..B@AA

-B:


-B: (Principles of Maximum Social Advantages)

(Contents)

(Objectives)

(Introduction)

B.A (The Principle of Maximum Social Advantage)

B.B (Maximum Social Advantage)

B.C (Summary)

B.D (Keywords)

B.E z(Review Questions)

B.F (Further Readings)

(Objectives)

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J fi

J z

J

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(Introduction)

(Fundamental Rule), z.z.z,zzz..-(Productive)(Unproductive)(evil) z.z,


, -(biased), z. ,,z(Productivity)

B.A (The Principle of Maximum Social Advantage)

(economic welfare)(as a whole)z(Public revenue) (Public expenditure) zz.z.zzz

zfi(disutility)(utility)fi(Surplus),fi(Net Welfare)z.zz-zz?

-B:


z. z.(Principle of Maximum Aggregate Welfare)

B.A.A (Extent of Public Revenue and Expenditure)

z.?-??-?z., z(Sacrifice),(benefit)(unit)z(point)(Marginal sacrifice)(marginal benefit)(coptimum Limit) z,(marginal disutility)

fi-

A E AF

B G AB

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Units of Tax and expenditure

Total social spent

Total social profit

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B.A.B (Distribution of Resources)

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B.A.C

A. ,,,z

B. ,,,,z, ,fi

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zzzz(HQ1=kQ2)OQ1OQ2z


Amount of Expenditure

Mar

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rofit

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B.A.D

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B.A.E (Distribution of Burden of Taxation)

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B. ......................

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D. ........................

E. ..................

B.B (Maximum Social Advantage)

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A. -,

B. -

C. -z,

(Test of Social Advantage)

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-B:


A. (Preservation of Community) -,,,(Peace and co-existence),,,-,

B. (Improvement in Production)-,()(),(),(),

C. (Improvement in Distribution) -,---(Efforts)(Unearned Income),. -()-,,()fi,--

D. (Economic Stability and Full Employment)-(-),(Over Production),-(Fluctuations)(Depression)(Effective Demand)

E. (Provision for Future)- ,


(Generations),,,

(Limitations)

-

(i) z z (Disadjustment between Disutility and Utility)-z-(Disutility)(Utility),zz,--

(ii) (Future Expectation)--z,zzfi,(Sensitive),

(Self Assessment)


F. ,

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-B:


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H.

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B.C (Summary)

J (Fundamental Rule),

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J ,

J

J

J -(Uses)(Marginal Return of Satisfaction)

J z

J -()- ,()fi,--

B.D (Keywords)

J (Revenue)-

J (Defence)-

B.E z (Review Questions)

A.

B.

C. -?


D. -

(a) (b)

: - (Answer : Self Assessment)

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C. D.

E. F()

G.() H.()

B.F (Further Readings)

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B. -..,..

C. -..B@@I

-C: ()


-C: ()

(Issues Related to Economic Activities of Public Finance) (EXP)

(Contents)

(Objectives)

(Introduction)

C.A (Economic Effects of Public Expenditure)

C.B (Summary)

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C.D z(Review Questions)

C.E (Further Readings)

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C.A (Economic Effects of Public Expenditure)

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(C) -(Employments)

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C.A.C (Other Effects of Public Expenditure)

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[email protected]

C.B (Summary)

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J fi -

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J (Government Departments)-

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C.C (Keywords)

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C.D z (Review Questions)

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C.E (Further Readings)

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(Contents)

(Objectives)

(Introduction)

D.A (Meaning of Budget)

D.B fi(Some Concepts Associated with Budgets)

D.C fi(Some Facts Concerning Public Budgets in India)

D.D (Summary)

D.E (Keywords)

D.F z(Review Questions)

D.G (Further Readings)

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D.A (Meaning of Budget)

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A.,

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B.-(-)()--

(i) (Actuals of Previous Year)

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-D: :


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A. z......................

B. .....................

C. ....................

D. ........................

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D.B fi (Some Concepts Associated with Budgets)

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(Secrecy)-(Budgetary Proposals)()

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D.C fi (Some Facts Concerning Public Budgets in India)

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C. (Contingency Fund of India)fififi(Contingency Fund of India)-


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z (Multiple Choice Questions)

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G. fi?

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H. z?

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D.D (Summary)

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D.E (Keywords)

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D.F z (Review Questions)

A. ?

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C. fi

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E. F.() G.() H.()

D.G (Further Readings)

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B. z-,..

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D. -z.,B@AB

E. -z,...B@AA


-E: : z z(Public Revenue: Revenue Receipts and Capital

Receipts)

(Contents)

(Objectives)

(Introduction)

E.A (Meaning and Significance)

E.B (Sources of Public Revenue)

E.C (Summary)

E.D (Keywords)

E.E z (Review Questions)

E.F (Further Readings)

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E.B (Sources of Public Revenue)

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(A) (Taxes)

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C. z(Administrative Revenue)

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E.B.A (Taxes)

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(B) (Personal Obligation) -(Personal Obligation) , , z

(C) (The Tax is Imposed for the General and Common Benefit) -z,,,

-E: : z z


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(D) (No Relation Between Taxation and State Services)-,,

fi(Land Tax),(Entertainment Tax),..(De Marco)-(Exchange Relationship)1.,,2

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(Elements of Tax)

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(A) (Compulsory Contribution)-,

(B) (Taxes are Imposed by a Government)-

1 The law of taxation in modern state is based on the assumption of an exchange relation-ship. That is the exchange of a payment of the state for the provision of public services by the state

2 The tax is the price which citizen pays to the state to cover his share of the cost the general public services which he will consume.

- 4 & 5 antonio de viti be macro first principle of public finance, pages 112-113


(C) (Involvement of Sacrifice)-,

(D) (Social Welfare)-,

(E) (The Benefit is not the Condition for the Payment)- ,,

(F) (No Relation with the Cost of Service)- ,(Cost),

(G) (The Payment from Income)-

(H) (Individual Payment)-

(I) (Legal Collection)-(Legal Collection)

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A. -,,,

-E: : z z


B. -(Benefit)(Amount)(Nature)(Payments)... (Direct Receipt)()(Adjustment)

, (General Social Policy)(Business Policy),fi(Government Monopolies)(French Tobacco Monopoly)-,(Taylor)(Control),

fi ,,fi,,(City Transport Service)-(Water Supply Service),fi ,,fi,(Enterprises),(Economy),,,,

E.B.C (Administrative Revenues)

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() (Fees)-

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(A) -, --(Voluntary Payments),

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() (Licence Fees)- T (Permission) (Privilage)

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-E: : z z


() (Special Assessment)

.(Special Assessment) ,-,fi,-fi-

(Characteristics)---

(A) (Special Purpose)

(B)

(C) -(Special Assessment)(Progressive)(Benefits)(Proportional)

(D)

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(Similarities)--

(A) (Object)-(Element of Public Purpose) ,(Tax)-(Special Assessment),-

(B) (Compulsory Contribution)--

(Dis-Similarities)--(Dis-Similarities)-

(A) (Dis-Similarities of Assessment)-(Special Local Improvement)

(B) (Basis of Assessment)-,,,(Benefit)

(C) (Dis-similarities of Object)--(Taxes)


(D) (Dis-similarities of Payment)--,-,-

() (Fines and Penalties)

(Fine) (Punishment)(Penalty)

() (Forfeitures)

(Bails)(Bonds),,(Contracts)

() (Escheat)

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E.B.D (Gifts and Grants)

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F.B (Adam Smiths Canons of Taxation)

F.C (Criticism of Adam Smiths Canons)

F.D (Other Principles of Taxation)

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F.G z(Review Questions)

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H.B (Evaluation of Theory)

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(Impact, Shifting and Incidence of Taxation)

(Contents)

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[email protected] (Impact of Tax)

[email protected] (Shifting of Tax)

[email protected] (Incidence of a Tax)

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AC.B :

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AC.C (Proportional, Progressive and Regressive Taxes)

AC.D (Specific Tax and Ad Valorem Tax)

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B. .......................

C. .........................

D. ..............................

E. ..........................

AC.B : (Direct and Indirect Tax : A Comparisonative Explanation)

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AC.C , (Proportional, Progressive and Regressive Taxes)

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AC.C.A (Proportional Taxation)

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AC.C.B (Progressive Taxation)

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AC.C.D (Degressive Taxation)


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AC.D (Specific Tax and Ad Valorem Tax)

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(i)

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AC.E (Single Tax System and Multiple Tax System)

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AC.E.A - (Single Tax-Only on Agriculture)

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(i) --,


(ii) -, ,

AC.E.B - (Single Tax-Only on Income)

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(i)

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(iii)

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G. ?

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AC.F (Value Added Tax (VAT) and Modified Value Added Tax (MODVAT) in India)

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fi-,AIGC

AC.F.A (Definition on Vat)

(Vat),,(Tax)

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AC.F.B (Vat and Sales Tax)

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(i)

(ii) --

(iii) ,

AC.F.C (Vat and Excise Duty)

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(i) fi(Specific)fi(Ad Valorem)

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(iii) ,

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AC.G - (Various Forms of Values Added Tax)

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(i) (Vat Based on Production)-,fi(Gross Receipts),

(ii) (Consumption Based Vat)-,,,(Sales Tax),

(iii) (Income Based Vat)-(Corporation Tax)-,,,,,,,,,

(iv) (Wage Based Vat)--(Inputs),,,

AC.G.A (Merits of Vat)

(A) - - ,--,

(B) -,

(C) -,

(D) -

(E) -

(F) -

-AC: :


(Demerits of Vat)

(A) -,--

(B) -,,

(C) -,

(D) -

AC.H (Modified Value Added Tax-MODVAT)

MODVATModified Value Added Tax MODVAT VAT(Value Added Tax)

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(VAT)AIGH..fi,fi(VAT)fi,(Manufactured Goods),(MANVAT)(Manufacturing Value Added Tax)MODVAT

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AA. (VAT)-

AB. -+

AC.

AD.

AE.

AC.I (Summary)

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J (VAT)AIED,--

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J MODVAT(Modified Value Added Tax)MODVAT VAT (Value Added Tax)

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J (Proportional)-

J (Specific)-

AC.AA z (Review Questions)

A.

B.

C.

D. fi

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A. B. C. D.


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AC. AD. AE.fi

AC.AB (Further Readings)

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B. -,..

C. :-.,B@@D

D. -,...B@AA

AD :


AD: (Effects of Taxation on Production and Growth)

(Contents)

(Objectives)

(Introduction)

AD.A (Effects of Taxation on Production)

AD.B (Effects of Taxation on Distribution)

AD.C (Measurement of Tax Progression)

AD.D (Distribution vs Production)

AD.E (Other Effects of Taxation)

AD.F (Taxation and Economic Stability)

AD.G (Regulatory Effects of Taxation)

AD.H (Summary)

AD.I (Keywords)

AD.A@z(Review Questions)

AD.AA(Further Readings)

(Objectives)

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J

J

J fi

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(Introduction)

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AD.A (Effects of Taxation on Production)

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(A) (Effects on Production)

(B) (Effects on Distribution)

(C) (Other Effects)

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AD.A.A , (Effects on Ability to Work, Save and Invest)

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AD :


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(ii) -,,fi,,fi

(Invest)(Savings)-,

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AD.A.B , (Effects on the Desire to Work, Save and Invest)

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(A)

(B)


(A) (Nature of Taxes)

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(Savings),,,(Demand)(Import Duties),(Low Export Duties),,,,

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(Preference) -

AD :


,(Unearned)

(Expenditure Tax)(Favourable) (Investment)(Deflationary Tendencies)(Effective Demand),

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(B) (Psychological Reaction of the Tax-payers)-

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(Incentive),

(iii) -,,,,fi,

(Elasticity)-(Inelastic),

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(A) -fi-

(B) -fi

(C) -fi

(D) - ,,

(E) -


., (Satisfaction) , fi (Relative Amount) 1,A B A ,B

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(A) (Effect of Taxation in Booms and Depression)-,,,

(B) (Effect of Taxation in Time of War)-,z,,,

(C) (Effect of Taxation and the Type of Industries)- ,,fi,-(Infant Industries)-fi,

(D) z (Effect of Taxation on Corporate Enterprise)--,,z(Corporations),(Investment)

1. Pigou, Economics of Welfare, page 90.

AD :


,,(Share holders)(Dividends),

,,fi , (Steeply Graduated Income Tax),-

AD.A.C (Effects of Taxation on Composition and Production)

---(Diversion)(Fiscal Policy),

fi (Resources),

,(Demand)(Inelastic)(Supply)(Incidence of Tax)(Buyer),,

(A) (Beneficial Diversion)- fi - ,


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(B) (Harmful Diversion)- z,,fi z

(C) (Diversion of Resources from Present to Future Use)---(Planning), (Resources),(Tax Exemptions)(Concessions)

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(D) (Diversion of Resources from One State to Another)----,,,

(E) (Diversion of Resources from One Country to Another)-(Enterprisers),fifi,,,

(F) (Protection and Diversion of Resources)-fi(Grants)(Bounties)(In the Long

AD :


Run),

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A. ......................

B. .....................

C. .........................

D. ...................

E. fi..............................

AD.B (Effects on Taxation on Distribution)

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(A)

(B)

AD.B.A (Nature of Taxation of Tax Rates)

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(Progressive Taxation), ,zz(Equitable Distribution),(Poppy)(Head),

(Tax System) (Principle of Ability to Pay),,(Unearned Income),,--z(Nature)z

AD :


,,,(Toll Tax)(Regressive Nature),,fi(Proportional Tax)-,-,fi,(Equitable),(Steeply Graduated)

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AD.C (Measurement of Tax Progression)

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dtdx

=

dtdx

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dtdx

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(Tax Scale), ,

(Formula),(Degree of Progression)-

P = dd' + k


P =

d =

d' =

k = (Positive Constant)

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AD.D (Distribution vs Production)

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,(Optimum Level),,fi

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AD :


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(Self Assessment)

(Multiple Choice Questions)

F. -

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G. ?

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()dydx ()

dxdy

H. dtdx

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I. ?

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A@. ?

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() ()

AD.E (Other Effects of Taxation)

(Effects of Taxation on Employment)

(Economic Stability),-.(Prof. Lerner)

(Effective Demand),


, -

AD.F (Taxation and Economic Stability)

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AD.F.A (Taxation and Inflation)

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AD.F.B (Taxation and Depression)

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AD :


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,,-,,fi(Deficit Budget)

(Functional Finance),

AD.G (Regulatory Effects of Taxation)

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fi - (State whether the following statements are True or False)

AA.

AB.

AC.

AD.

AE.

AD.H (Summary)

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J (Purchasing Power)

J (Invest)(Savings)

J ,(Incentive)

J (Expenditure Tax)(Favourable) - (Investment)

J (Elastic),

J (Inelastic),AB,@@@

J ---(Diversion)(Fiscal Policy)

J fi-

J z

J , (Wagner),

J (Optimum Level) ,fi

AD.I (Keywords)

J (Preference)-

J (Invest)-

J (Enterprisers)-

AD :


AD.A@ z (Review Questions)

A.

B.

C. ?

D. ?

E. -?

: (Answer: Self Assessment)

A. B. C.

D. E. F.()

G.() H.() I.()

A@.() AA. AB.fi

AC. AD.fi AE.

AD.AA (Further Readings)

A. -

B. -,..,

C. :-.,,B@@D

D. -,...B@AA


-AE: :

(Public Debt : Meaning of Public and Private Debt and its Limitations)

(Contents)

(Objectives)

(Introduction)

AE.A ()(Comparision between Private and Public Debt)

AE.B (Objects of Public Debt)

AE.C (Classification of Public Debt)

AE.D (Summary)

AE.E. (Keywords)

AE.F z(Review Questions)

AE.G (Further Readings)

(Objectives)

-

J

J

J fi

(Introduction)

,, (State) ,,,(),

. . . , z

-AE : :


(Causes of Borrowing)

,,,(Current Revenue)

,(Private Demand)(Effective Demand) -

(A) -,B@,BB.DB,BF.C,zBG.I,[email protected],

(B) -,,. . . ,,,,

(C) -,. B@@C@@G@

(D) -,fi,,,z,,

(E) -E


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fi (Suggestions to Improve Fiscal Policy)

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(B) -

(C) --

(D) -

(E) -,,,

(F) --

(G) -,

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-AE : :


AE.A () (Comparison between Private and Public Debt)

fi,(Productive Uses),(Sacrifice)--

(A)(Sources)

(B)

(C)

(D),fi(Corporations)

(E)

(F),,(Nature)

(G)(Policy)(Borrowing)fi,fi,

(Self Assessment)


A. ...........................

B. .........................

C. .............................


D. .............................

E. ......................

AE.B (Objects of Public Debt)

(A)(Revenue),(Expected Revenue)

,,,

(B) (In Times of Depression)-,,,(Infra Structure Services),,,

(C) (To Curb Inflation)-,

(D) (To Finance Development Plans)-,,-

(E) (To Finance Public Enterprises)-

(F) (Expansion of Education and Health Services)-,z(Productive)

-AE : :


(G) (To Finance War)--(Taxation),

(H) -,

(I) -,

(A@) - -fi

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(Multiple Choice Questions)

F. ?

() ()

() ()

G. ?

() ()

() ()

H. ?

() ()

() ()

AE.C (Classification of Public Debt)

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(A) (Internal and External Debt)

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,,, , ,,,,(Debtor Country),,,,,,fi,(Productive Purposes),,

(B) - (Productive and Unproductive Debt)

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(C) - (Redeemable and Irredeemable Debt)

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, (Short Term Debts)CI(Mature)

-AE : :


(Treasury Bills)(Long Term Debts)A@(Medium Term Debts)E

(D) - (Funded and Unfunded Debt)

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(E) (Voluntary and Compulsory Loans)

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(F) (With Rate of Interest and Without Rate of Interest)

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(G) - (Purchasable and Non-Purchasable Debt)

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(H) (Total Debt and Net Debt)

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(I) (Short Term and Long Term Debt)

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(Self Assessment)

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(State Whether the following statements are True or False)

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AA.fifi

AB.,-

AC. -,

AE.D (Summary)

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J

J fi,

J (Productive Uses)-,(Sacrifice)

J ,(Expected Revenue)

J

J ,,,,,,,

-AE : :


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J -,,,-

J -,(Terminable Debt) -(Irredeemable or Perpetual Debt)

AE.E (Keywords)

J (Expected)-

J (Debtor)-

AE.F z (Review Questions)

A.

()

()

B. fi?

C. ?

D. ?

E.


(A) (B) (C) (D)

(E) (F)() (G)() (H)()

(I) (A@)fi (AA) (AB)fi

(AC)

AE.G (Further Readings)

A. -..,..

B. -,..,

C. :-.,B@@D

D. -,...,B@AA


-AF: :

(Effect of Public Debt : Public Debt and Economic Growth)

(Contents)

(Objectives)

(Introduction)

AF.A (Other Effects of Public Debt)

AF.B (Burden of Public Debt)

AF.C (Loans Vs Taxes)

AF.D (Difference between Taxes and Loans)

AF.E (Public Debt Management)

AF.F (Principles of Public Debt Management)

AF.G (Redemption of Public Debt)

AF.H (Methods of Repayment)

AF.I (Advantages and Dis-advantages of the Public Debt)

AF.A@(Public Debt and Economic Development)

AF.AA(Inflation)

AF.AB(Role in Regulating the Economy)

AF.AC(Summary)

AF.AD(Keywords)

AF.AEz(Review Questions)

AF.AF(Further Readings)

(Objectives)

-

J -fi

J

J

-AF : :


J

J fi

J

(Introduction)

-(Revenue Effect)(Expenditure effects)

(A) (Revenue Effect)-fi,,(Securities)fi,

(B) (Expenditure Effect)-fi,fi,fi,,(Tax Revenue)(Difference)(Proceeds),fi(Capital Nature),(Current or Revenue Expenditure),

AF.A (Other Effects of Public Debt)

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(A) ,

(B) ,

(C) ,

(D) ,

(E) ,

(F) ,

(G)


(A) (Effect on Consumption)

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(B) (Effect on Production)

(Debentures) (Government Securities) (Net Effect) fifi

,

(Elastic),(Creation Credit)(ad-hoc),,

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-AF : :


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(C) (Effects on Distribution)

,(Bond Holders)-,-,

- (Inflation)

(D) (Effects on Private Sector)

(Economy),(Circulation) , ,(Current Consumption)(Borrowing) , ,fi

(E) (Effect on Cost of Production)

-(cost of production)(Raw Material)(Factors or Production) ,


, ,,(Labour),

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(F) (Effect on Employment)

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(G) (Effects on Investment)

AF.B (Burden of Public Debt)

(Sacrifice),,

(Direct Money Burden)(Direct Real Burden)(),(Indirect Burden)

-,(Internal)(External)(Price Level)

-AF : :


(Value of Money),(real burden)

(Estimation of the Burden on Public Debt)

- (Methods)-

(A)(B)fi(Debt Services)

(Burden on Internal Debt)

,(Direct Money Burden),()()--z(Productive Purposes),(Investment)(Dead Weight Debt),,,z(Proportionately),(Direct Real Burden),(Progressive Taxation)(Counter Balance)(Net increase)

,,,(Active),,


(as a whole) , (Unrealistic)

(Burden of External Debt)

z, ,

z,-,(Net Income),

(Direct Money Burden) ,(Direct Real Burden)(Net Loss),(),-,,,(Relative Burden)

,(Debtor Country),,(Creditor Country)fi,fi,fi

(Direct Real Burden),(Deal Weight Debt),-

-AF : :


(Posterity),,,,(Debtor Country)fi,(Alexander Hamilton),,,fi,(Exploitation)

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(Indirect Burden),,-(Dead Weight Debt)

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AF.C (Loans vs Taxes)

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(A) -,,, ,,

(B) -,,,fi,

(C) -,


(D) -,,,,,

(E) -

(F) --,,,

AF.D (Difference between Taxes and Loans)

(A) (Current Income)

(B) (Funds)

(C) (Pressure)

(D) fi

(E)

,

?

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(A) ,-

-AF : :


(B) (Non-Recurring) -

(C) -

(D) ,-(i)(ii)-(iii)-z-

AF.D.A (Role of Taxes and Loans in Financing Development Plans)

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-(Development Projects),fi, ,fi(Postponement)

(Investments)(Budget Surpluses)-,,

, (Loans)(Development Finance)


(Real Burden),

(Self Assessment)


A. .......................

B. ............................

C. ...............................

D. ............................

E. ..............................

AF.E (Public Debt Management)

(Methods) (Economy),(Inflationary)(Deflationary)(Deficit Financing), (Inflation)(Deflation)

AF.E.A (Definition and Significance)

fi,,(Maturing Debts),-fifi(Mature),

-AF : :


,,(Monetary and Fiscal Policies)-

- ,-

AF.F (Principles of Public Debts Management)

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(A) (The Interest Cost of Servicing Public Debts Must be Minimised)

,,,-

,(Monetary Operations)

,(Economy),,

(B) (Satisfaction of the Needs of Investors)

fi(Investors)

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(Long Term Securities),(Security Holders)

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(C) (Funding of Short Term Debt into Long Term Debt)

(,)(Funding Operations),,(Monetary Management)fi

,(Long Term Funds), (Private Investment),(Recession),

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(D) (Public Debt Policy Must be Co-ordinated with Fiscal and Monetary Policy)

(Co-ordination)

-AF : :


,(Conversion),,

(E) (Maturity Distribution and Kinds of Debt Holders)

,(High Liquidity)(Anti-Deflationary),

,

AF.G (Redemption of Public Debt)

(Redemption)-(Provision),

AF.G.A (Advantages of Debt Redemption)

(A)

(B)

(C)

(D)

(E)

(F)

(G) (Private Investment)


(H) (Deflationary Measures)

AF.H (Methods of Repayment)

--

(A) (Debt Repudiation)

AIAG,-fiAHFA-FE,

,,(),fi,

,(Immoral)

(B) (Refunding)

,(Maturing Bonds)-(Maturity Date) , , ,

(C) (Conversion of Debts)

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-AF : :


,(Credit) fi,,

(Refunding)(Conversion)-(Postponement)

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AF.H.A (Actual Repayment)

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() (Sinking Fund)

, (Fund),,-,

,(Loans),

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(Slow Process)


() (Surplus Revenue)--(Surplus Budget),-,(Depression)

() (Terminal Annuties)-, ,

() (Capital Levy)-(property and wealth)-

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(A) -,(Dead Weight)fi,

(B) ,

(C) ,fi,

(D) ,

(E) (Depression),

(F) ,,

(G)

-AF : :


(H) ,,

fi- z ,fi(Deflationary)

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(A) ,

(B) (Inflow),

(C) -,,,

(D) (Tax Evasion)

(E) ,fi,

(Repayment of External Debt)

,,(Export Surpluses),,-,fi

(Self Assessment)

fi (State Whether the following Statement are True or False)

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G.


H.

I. ,

A@.

AF.I (Advantages and Dis-advantages of the Public Debt)

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(A) -,,

(B) --

(C) --

(D) -

(E) -,

(F) - ,

(G) -

(H) -,,,

(I) - -

(A) -,

(B) -

(C) -

-AF : :


(D) -

(E) -

(F) --

(G) -

AF.A@ (Public Debt and Economic Development)

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(A) (Development of Financial System)

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(B) (Saving and Capital Formation)

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fi,

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(Infrastructural Facilities),z,fi

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AF.AA (Inflation)

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(B),-

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(4)-,,()

AF.AB (Role in Regulating the Economy)

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(Self Assessment)

- (Multiple Choice Questions)

AA.

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AB.?

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AC.

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AF.C (Summary)

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J -

J

J

J fi(Investors)

J , ,,

J ,-,,,

J

J

J z(,)

AF.AD (Keywords)

J (Revenue)-

J (Expenditure)-

-AF : :


AF.AE z (Review Questions)

(A) ?

(B)

(C) -

(D)

(E)


(A) (B) (C) (D)

(E) (F) (G)fi (H)

(I)fi (A@) (AA)() (AB)()

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AF.AF (Further Readings)

A. -

B. -..,..

C. -,..

D. -.,B@@I

E. :-.,B@@D

F. -,B@AB

G. -,...B@AA


-AG: (Public Expenditure)

(Contents)

(Objectives)

(Introduction)

AG.A (Reasons for the Growth of Public Expenditure)

AG.B (Public Expenditure and Economic Life)

AG.C (Principles of Public Expenditure)

AG.D (Summary)

AG.E (Keywords)

AG.F z(Review Questions)

AG.G (Further Readings)

(Objectives)

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1 The very best of all plans of finance is to spend little. J.B. Say2. The older English workers did not need a theory of expenditure because the theory of

government which they held implied a fixed limit to government functions.

Quoted by Hugh Dalten Op.cit P-139 3. Every particle of expenditure beyond what necessity absolutely requires for the preservation

of social order and for protection against foreign attack it waste and an unjust and oppressive imposition of the public.

Quoted by Adams, Science of Finance p. 50.


AG.A (Reasons for the Growth of Public Expenditure)

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(B) (Industrial Development)-(Industrial Revolution),,,-,-(Labour Relations),,,

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(D) (Nationalisation of Industries and Trades)- ,, ,(Monopolies)-,

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AG.AA.A (Wagners Views on Public Expenditure)

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AG.A.B (Difference between Private and Public Expenditure)

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(F) (Object)-(Social Welfare),(Individual Welfare)

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-AG :


(Self Assessment)


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AG.B (Public Expenditure and Economic Life)

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AG.C (Principles of Public Expenditure)

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