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HS 549

Course Co-ordinator: Dr. Mantu Kumar Mahalik

3 credits [3-0-0]

Unit-1: Role of Government in Economy, Theory of Social goods, and Theory of Public
Unit-2: Public Expenditure: Growth and structure of Public Expenditure, Public
expenditure management, cost benefit analysis of public expenditure, evaluation of public
expenditure-principle and problems, subsidies
Unit-3: Public Revenue: Issues in individual income taxation, corporate taxation, income
tax integration, principle of taxation, indirect taxation-principle and issues, value added tax
(VAT)-principle and issues, and Non-tax revenue
Unit-4: Federal Finance: Principle of federal finance, centre-state relationship.
Course Outcomes: Public economics is the study of government policy in the basic provision of
social goods and services. In making government intervention more effective in the intervention of
social sector, the better management of government investment and expenditure should be necessary.
To check whether the effective allocation of government spending towards economic activities, public
policy as part of public economics plays a vital role in this aspect. The main objective of public policy
is to create employment opportunities, reduce poverty and income inequality, and also to achieve
sustainable economic growth and development. In order to have sustainable growth and development,
financing fiscal spending should be accommodated by the revenues generated from various fiscal
direct and indirect taxes. Since the developing countries are often characterized by the presence of
resources and (financial, human, social and physical capitals), it is useful for the underdeveloped
economy to prefer some sort of changes and shifting transformation from planned economy to market
oriented economy. Such liberal policy will enable fiscal government of developing countries to
support their consumption and investment expenditures by attracting more private players as we
believe that private players are operationally efficient. In this regard, microeconomic theory is utilized
to assess whether the private players likely to provide efficient outcomes in the absence of
governmental interference. Inherently, this study involves the analysis of government taxation and
expenditures. This subject encompasses a host of topics including market failures, externalities, and
the creation and implementation of government policy. Public economics builds on the theory of
welfare economics and is ultimately being used as a tool to improve social welfare.
Essential Readings
1. Harvey, Rosen, Public Finance (Second Edition), IRWIN, Homewood, 1988.
2. Atkinson, A. B. and Stiglitz, J.E., Lecturer in Public Economics, McGraw-Hill, New York
3. Myles, Garesth D, Public Economics, Cambridge University Press, 1995.
Supplementary Readings
1. Boadway Robin W Wildasin David E., Public Sector Economics, (2nd Edition), Little Brown,
Boston, 1984.
2. Musgrave, Richard A & Shoup, Carl S (ed), Classics of the Theory of Public Finance,
Macmillan, 1962.
3. Musgrave Richard A, Fiscal System, Yale University Press, New Haven and London, 1969.