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. Public economics (or economics of the public sector) is the study of government policy through the lens of economic efficiency and equity. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve social welfare. Public economics provides a framework for thinking about whether or not the government should participate in economic markets and to what extent it should do so. Microeconomic theory is utilized to assess whether the private market is likely to provide efficient outcomes in the absence of governmental interference; this study involves the analysis of government taxation and expenditures. Public Finance is that part of finance which hovers around the central question of allocation of resources subjected to the budget constraint of the government or public entities. It is that branch of economics which identifies and appraises the means and effects of the policies of the government. Public sector finance tries to examine the effects and consequences of different types of taxation and expenditures on the economic agents of the society and ultimately on the entire economy. Public finance also analyses the effectiveness of the policies aimed at certain objectives and consequently to the development of procedures and techniques for increasing the effectiveness of the policy.
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 syllabi of various Indian universities it ideally caters to the academic needs of postgraduate students of public economics.