Finance is a field that deals with proper schemes of investment. It is related to certain dynamics such as liabilities and assets. Public Finance deals with an integral part of the economic situation of the country. The government plays an important role in this sector of finance management. It incorporates a host of risks and uncertainties. The only solution to this problem is proper planning. Public finance is a part of general finance where analyzing the market and the present status of the government is quintessential while making the investment. The public finance domain looks into three major aspects of finance management such as Stabilization of the Economy With the growing population the growth of urbanization and industrialization are directly linked up. In this case the market economy also goes through innumerable highs and lows. As all these aspects are interlinked it is extremely significant that a stable market economy is maintained. Any kind of inefficiency can cause distortion of the entire system. This macro economy sector comprising of the larger sectors such as the global, regional, and national economies has to cater to various facets of economy such as the structure and the performance. The fluctuations that take place during the decision making can affect the national economy in huge proportion. The indicators of the macro economy are price indices, the rate of unemployment and GDP. Allocating the finance in the best possible way One of the most vital points for allocating finance in an efficient manner is that each product, goods or service should be provided in the best quality to the consumers. It should be done in a manner that the consumer is able to avail some marginal benefit which shall be less than the cost of production. The best technique of productive efficiency is by providing goods at the lowest total cost. Maintaining proper distribution Market failure is one of the toughest times. The crisis can shatter the whole system of management. It takes place especially when the goods and services are not provided efficiently. The market then faces a setback which has to be dealt with urgently and with utmost care. If one link in this whole network falters then the entire system seems to be facing a crisis which is very difficult to be tackled in such a short span of time. Income distribution directly affects the GDP. The distribution of income among the nation’s population is one of the crucial aspects of public finance. This has always been a vital matter of concern. Factors such as income inequality can have a huge impact on the whole scheme of finance distribution. Here poverty or low pay scales can be the reasons for the difficulties in taking proper decisions. There are different theories which can provide a guideline during this kind of crisis but applying those can be a tough one. The Lorenz Curve can come to rescue as it helps in presenting a curvature of the recent researches done on the market regarding income inequalities.… Read More →