The increase in government spending increases the deficit, but that increase is partly off set by an reduction in the deficit associated with the increase in GDP due to the increase in government spending.

In reference to the Indian Government budget, budget deficit is of four major types.
(a) Revenue Deficit
(b) Budget Deficit
(c) Fiscal Deficit, and
(d) Primary Deficit

(i) It is the easiest way for the Government to get rid of the burden of payment of a loan.
(ii) In such cases, the Government does not recognise its obligation to repay the loan.
(iii) It is certainly not paying off a loan but destroying it.
(iv) However, in normal case the Government does not do so; if done it will lose its credibility.

According to Dalton “A Tax is a compulsory contribution imposed by public authority, irrespective of the exact amount of service rendered to the tax payer in return and not imposed as a penalty for any legal offence.”

i) As a producer of goods and services.
ii) As a supplier of public goods and social goods.
iii) As a regulator of the system.

(i) During the process of growth of an economy, certain sections of the society gain at the cost of others.
(ii) The Government needs to intervene with fiscal measures to redistribute income.

(i) The term fiscal is derived from Greek word which means basket and symbolizes the public purse.
(ii) Hence the subject ‘Public Finance’ has been newly termed ‘Fiscal Economics’.

(i) Direct taxes
(ii) Indirect taxes.

When the responsibilities of the state increase, it supplements traditional revenue sources by borrowing from individuals and institutions within and outside the country. This is public debt.

(i) CGST - Central Goods and Services Tax
(ii) SGST - State Goods and Services Tax
(iii) IGST - Integrated Goods and Services Tax

Income tax, wealth tax, corporate tax, capital gains tax.

(i) It involves fresh evaluation of expenditure in the Government budget assuming it as a new item.
(ii) A review is made to justify the project based on the socio-economic objectives and priorities of the society.
(iii) Government of India presented Zero Base Budgeting in 1987-88.

(i) Both are source of public revenue.
(ii) Tax is a compulsory payment but the tax payer cannot claim any specific benefit by paying a tax.
(iii) Fee does not involve compulsion.
(iv) Government provides certain services (e.g.) driving license and charges a fee for it.

(i) The income of the government through all sources is public revenue.
(ii) Public revenue deals with the methods of raising public revenue such as tax and non-tax, the principles of taxation, rates of taxation, impact, incidence and shifting of taxes and their effects.

(i) "Public finance is one of those subjects that lie on the border linè between Economics and Politics. It is concerned with income and expenditure of public authorities and with the adjustment of one to the other". . - Huge Dalton
(ii) Public finance is an investigation into the nature and principles of the state revenue and expenditure - Adam Smith