Public finance is composed of the following constituents public: Expenditure Revenue Debt ( Financial ) administrationPrivate finance is the study of the income, debt and expenditure of the individual or a privatecompany or business venture or an association. It includes the study of their own view regardingearning expenditure and borrowing.Similarities and Differences between Public Finance and Private FinanceDespite the differences in scope and nature of the public finance and private finance, following aresimilarities.SimilaritiesI.Based on Similar TheoriesThe basis of public as well as private finance is the same. Both seek the help of various principlesof economics in determining various interrelated problems. For example, a person wants to securemaximum utility on count of minimum expenditure and government too wants to secure publicutility by spending the least possible amount of public money.II.Both Face the Problem of ScarcityLimitation of the resources is the problem before private as well as public finance. Individuals’resources are limited up to this earnings; past savings and ancestral property similar governments’resources also depend on taxable capacity of the individuals earnings of the various corporationsetc. None of the two is capable of extending its expenditure beyond a certain limit; hence non canafford to go to the infinity in the use of finance.III.Both Require Efficient AdministrationPrivate as well as public finance require efficient administration to look after the various acts ofextravagance. In the event of the failure of an efficient administration both might be compelled toface ‘dire-consequence’ in their financial field, individual never wants any kind of wastage ormisuse of his income, so the government if it is alive to the sense of duty

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Establishment of public funds in the public sector
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