Question

Opine that you are the minister of state responsible for the country's public finance and treasury. Pls debate the policies you will prefer for an effective public finance program and the positive effects that these preferences will add to public finance. (Pls use at least 1000 words)

Answer 1

*Answer:

Effective Public Finance program

It is true to say that for the better control and progress process there should be effective public finance program at time to time in the country to reduce the burden of unemployment , poverty in the country and also government should take efforts to raise the standard of living of the people in the country by giving more and more investment opportunities so that businesses should grows at speedy rate and also increase the level of GDP of the country.

Fiscal rules under the public finance program help to economic policymaker by setting the target for government spending and the debt , there must be balance regarding the debt rule and also make a balance regarding budget deficit, there should be proper growth and expenditure should be made to make more and more investment.

Increasing the rate of GDP help to create more benefits to the exporter and help to grows the businesses globally and take advantage from them. States should make policies to cut down the bank rate and the repo rate so that more money available to the public for borrowing and make investment accordingly.

For the long term development of the program bank rate and the repo rate should be under control by the banks through the monetary polices measures where bank rate is the rate at which reserve bank of the country provide loan to the commercial bank for the long term needs and on the other hands repo rate is the rate at which reserve bank of the country provide loan to the commercial bank for the short term needs of the banks.

So if monetary system of the country help in cutting down the bank and the repo rate which more money available to th public for investment purpose and help to create employment , reduce poverty, increase standard of living of the people, increase export opportunities and also helpful in the nation development.

On the other side Fiscal policy also plays an important role regarding various aspects like

-Public revenue

-Public expenditure

-Public debt

Under the public revenue government should take effort to increase their revenue sources by the way of increasing taxes and also finding new areas for tax collection so that this money is helpful in nation development and also it will give investment opportunity to the public in new areas and also government should raise their public welfare program through these revenue sources.

There are various ares which are funded from the source of public revenue like public health program, general welfare of the public , police and administration , defense and educational program for the public. So, it is effective public finance program as government should spend maximum amount fo the security , prosperity and also for the welfare of the people of country.

Public expenditure refers to the expenditure where government spend lot of money for the public it means these expenditure are for the public development through more and more investment.

It is to be observed that if the government spend millions of dollar in investment in the country , shows that it give rise to raise the level of income of the people of the country due to the fact that one person expenditure is another person income , so this theory is utilize the  state and government towards welfare and also give chance to the businessman regarding investment opportunity.

Public debt is also one of the main source of revenue for the government but this create liability or burden upon the state or government from public debt , there are two sources

- internal debt

- external debt

As per as internal debt is concerned , it means take borrowing within the country for the development program and if the government take borrowing from the source outside the country , it is refer to external debt .

Out of these two internal and external debt , external has more serious impact upon economy as it gives extra burden upon the government and also government work under pressure from those country where they borrow.

Through more and more investment in the country , by the fiscal measures help to make balance fo payment situation under control , if country's export is more than the country's import than BOP situation is favorable , otherwise adverse.

Under the public finance program government also adopt boom period policy and depression period policy under which more loans and advances provide to the public during depression period and flow strict policy towards boom period in order to control credit in the country.

under the program government sources are from the taxes that is public revenue and from the public debt but public expenditure are made in order to spend for investment and creating employment in the country.

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