Public Finance

Paper Code: 
25CECO 611
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 
1. To orient the students with the nature and scope of Public Finance. 
2. To comprehend the meaning, classification and effects of public expenditure, taxation and public debt. 
3. To acquaint the students with the centre state financial relations in India. 
 
Course Outcomes: 

Course Outcomes (Cos):

Course Code

Course Title

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies

 

25CECO 611

 

Public Finance

(Theory)

 

Students will:

CO85: analyze nature and scope of public finance, fiscal functions, public, private and merit goods, market failure and principle of maximum social advantage

CO86: analyzevarious aspects of public expenditure and public revenue in India

CO87:Analyze various aspects of taxation and the structure and reforms of taxation in India.

CO88: examine various aspects of public debt and its trends in India

CO89: comprehend financial administration & decentralization and analyze the Union budget

CO90:contribute effectively in course-specific interaction

Teaching Strategies:

 

Interactive Lectures, Discussion.

 

Learning activities for the students:

 

Presentations, Assignments and Group discussions.

 

Class activity, Assignments and Semester end examinations

 

 

18.00
Unit I: 
Introduction to Public Finance
  • Nature and scope of public finance; fiscal functions: an overview
  • Public goods, private goods and merit goods
  • Market failure and externalities, government intervention
  • Property rights, the Coase theorem
  • Principle of maximum social advantage

 

18.00
Unit II: 
Public Expenditure& Public Revenue
  • Public Expenditure: meaning, classification
  • Principle of public expenditure
  • Canons and effects of public expenditure
  • Wagner’s law of increasing state activities
  • Peacock-Wiseman hypotheses
  • Trends of public expenditure in India
  • Sources of public revenue
  • Taxation - meaning, canons and classification of taxes

 

18.00
Unit III: 
Taxation
  • Taxation: impact and incidence of taxes
  • Theories of tax shifting
  • Incidence and shifting of commodity taxes under different cost conditions
  • The benefit and ability to pay approaches
  • Taxable capacity
  • Effects of taxation
  • Optimal taxation
  • Tax System in India: structure and reforms

 

18.00
Unit IV: 
Public Debt
  • Objectives and classification of public debt
  • Burden of public debt - Ricardo Pigou Thesis, Buchanan Thesis, BDK Thesis, Musgrave thesis of Inter Generation Equality
  • Effects of public debt
  • Methods of debt redemption
  • Debt management
  • Loans versus taxes
  • Trends of public debt in India

 

18.00
Unit V: 
Financial Administration & Financial Decentralization
  • Kinds of government budgets; Economic and functional classification of the budget
  • Centre state financial relationship
  • Role of Finance Commission
  • Recommendations of the latest Finance Commission
  • Fiscal federalism in India
  • Budget deficits in India
  • Current Central Government budget

 

Essential Readings: 
  1. Singh J. and Lekhi R.K.., Public Finance, Kalyani Publishers, Reprint Edition, 2021.
  2. Bhatia, H. L.,Public Finance, Vikas Publishing House,30th Edition, 2020.

 

References: 

Suggested Readings:

  1. J. Hindriks, G. Myles: Intermediate Public Economics, MIT Press, 2006
  2.  H. Rosen, T. Gayer: Public Finance, 9th ed., McGraw-Hill/Irwin, 2012
  3.  Joseph E. Stiglitz, Economics of the Public Sector, W.W. Norton & Company, 3rd edition, 2000
  4.  R.A. Musgrave and P.B. Musgrave, Public Finance in Theory & Practice, McGraw Hill Publications, 5th edition, 1989
  5.  Report of the latest Finance Commission
  6.  Economic Survey, Government of India (Latest)
  7.  State Finances: A Study of Budgets, Reserve Bank of India (Latest)

E-Resources:

  1. http://www.untag-smd.ac.id/files/Perpustakaan_Digital_2/PUBLIC%20FINANCE%20Handbook%20of%20Public%20Finance%20(2004,%20Springer).pdf
  2. https://epgp.inflibnet.ac.in/Home/ViewSubject?catid=NEp/xikgBgNtfA+sgFQAcA==

Journals:

  1.  Public Finance Review https://journals.sagepub.com/home/pfr
  2.  International Tax and Public Finance https://www.springer.com/journal/10797

 

Academic Session: 
2025-26
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