Traditionally the term ‘Public Finance’ has been applied to the package of those policies and operations which involve the use of tax and expenditure measures, while budgetary policy is an important part to understand the basic problems of use of resources, distribution of income, etc. There is a vast array of fiscal institutions–tax systems, expenditure programmes, budgetary procedures, stabilization instruments, public debt policies, level of government, etc., which raise a spectrum of issues arising from the operation of these institutions. Further, the existence of externalities, concern for adjustment in the distribution of income and wealth, removal of poverty, etc., require political process for their solutions in a manner which combines individual freedom and justice. The problem of allocation of resources between public goods and private goods is a perennial problem. Then in a democracy there is a political process of voting to decide about the budgetary policy to be adopted. Therefore, now more attention is paid to a wider coverage of government activities relating to financial aspects and the subject is known as ‘Public Economics’. The present book is an excellent presentation of fiscal institutions and a careful analysis of the issues underlining budgetary policies in general and Indian experience in particular. Based on the curriculum prescribed by the University Grants Commission (UGC), it ideally caters to the academic needs of postgraduate students of public economics. The book contains chapters on public sector vs. private sector. Theory of public choice and changing perspective about the role of the government. Special focus of the book is on Indian Public Finances including the fiscal crisis of 1991 and fiscal sector reforms.
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