Question

Distinguish between the following concepts:

Public finance and Private Finance

Give one point of difference between public finance and private finance.

In what way does public finance differ from private finance?

Mention three points of difference between public finance and private finance.

Point out the dissimilarities between public finance and private finance.

Answer 1

Points	Public finance	Private finance
Meaning	Public finance is concerned with the revenue/incomes and expenditure, borrowings, etc. of the economy or government.	Private finance is the study of income and expenditure, borrowings, etc. of individuals, households, and business firms.
Adjustments	The government adjusts the income, according to the size of expenditure on different segments.	Individuals adjust their spending as per their income.
Objective	Public finance aims to offer the maximum social advantage to society.	Private finance aims to fulfil private interests.
Nature of Budget	The government prefers a deficit budget.	An individual attempts to maintain a surplus budget.
Financial Transaction	Transactions are open and known to all.	Transactions are kept secret.
Determination of expenditure	The government first determines the volume and different ways of its expenditure.	An individual considers his income and then determines the volume of expenditure.
Right to print currency	The Government can print notes through the Reserve Bank of India.	The private individual does not enjoy the right to print currency.
Effect on economy	Public finance has a tremendous impact on the economy of the country.	Private finance has a marginal effect on the economy of a country.
Elasticity of finance	Public finance is more elastic.	There is not much scope for changes in private finance.
Credit status	The high degree of credit in the market.	The credit of a private individual is limited.