Public finance is the aspect of economics that deals the income and expenditure of the government of a country. It is the funds generated for the provision of security as well as economic and social services to the citizens. It is public because it is owned by nobody rather to everyone in the state.

However, government expenditure can be grouped into four namely:

  1. GENERAL SERVICES – Under general services, government expenditures are on defense, police, law courts, prisons, and civil service.
  2. SOCIAL AND COMMUNITY SERVICES – Under this, government expenditure is on Education, Medical services, provision of basic infrastructures like Electricity, pipe-borne water, public housing and recreational centres. 
  3. ECONOMIC SERVICES – Under this, government expenditure is on various Agricultural projects like OFN, Green Revolution, Fisheries, Forestry, Transport and communications.
  4. TRANSFERS – Under this, government expenditure is on payments of interest on national debt, pension allowances, unemployment grants to local authorities and social security.


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