What Is the Scope of Public Finance in India?

Due to exciting advancements in digitalisation and energy transition, India is on track to become the third-largest economy in the world by 2027, and economists already consider it the fastest-growing economy today [1]. Much of the growth is due to public finance, or how the Indian government spends, allocates, and saves public money. 

Public finance involves government money at all levels, from local to state and federal government bodies. Its focus ensures stability and equality for citizens while saving for and investing in economic goals.

Discover more about the scope of public finance in India and what it might require to build a career in this field. 

Who works in public finance?

People who work in public finance tend to have business or financial backgrounds, including financial managers or advisers who help to decide efficient ways to use public funds. They do so under the umbrella of the Department of Expenditure and within divisions such as the State division, which oversees special projects, debts, and fiscal roadmaps for India's states. Those who work in the Central division support the publicly funded projects and activities associated with the Central Plan of the Government of India.

Some work at dedicated firms collaborating with different government departments to ensure the proper handling of public funds and that those choices are within the government’s stated goals. Others work directly for the government, and some work within the institutions and think tanks that work closely with the government to help shape effective policy.

The scope of public finance in India

Public finance is wide-ranging and handles many different practices and strategies for managing public money. It includes revenue-based activities like taxation, but it goes beyond revenue generation to encompass inherent costs of governmental administration and more. 

Some facets of public finance in India include the following areas.

Revenue and expenditures

Public finance deals with the revenue brought into and the expenditures flowing out of the government. Revenue includes incoming money from taxation, fines, import fees, and currency creation. Expenditures involve the costs of running a government and other goals such as services and goods that benefit the country, welfare programmes, wealth distribution, and economic stabilisation efforts. This facet also includes expenditure and revenue management, which requires professionals to review the actual collection and spending practices to ensure optimal efficiency and adherence to specific standards.

Debt collection and payments

Public debt and tax collection are among the government’s primary financial concerns. Public finance covers how the government collects the different types of revenue and ensures that it does so effectively and transparently. Public debt is another facet, one that may occur when government spending outpaces its earnings, which can be the case in public aid programmes designed to provide relief to the country’s citizens.

Economic development

This area of public finance is vital to a government’s role in caring for its citizens. Economic development involves raising, saving, and spending money on infrastructure, including roads, bridges, railways, and hospitals. This facet also includes stabilisation, which ensures that the government's undertakings don’t negatively affect the economy as these funds are spent or invested. Economic development also comprises controlling the tax rate and increasing or lowering it as needed.

Financial administration

Financial administration handles the physical processes of taking in money, allocating it, and spending it effectively. It includes improving processes and optimising how the government handles money to enhance its effectiveness. Financial administration often includes multi-layer processes within departments that help maintain the government’s flow of funds, correct any imbalances, and improve the processes to correct those imbalances.

Budget preparation

Budgets help government officials see how the government as a whole or departments within the government allocate money and identify any necessary policy changes to reflect the reality of the government’s spending, such as more investment opportunities or the raising and lowering of taxes. The budget is the master financial plan, which helps keep all transactions transparent during audits. Financial professionals might recommend fiscal reforms to help avoid budget deficits.

Outlook for public finance positions

Public finance positions worldwide are in high demand, with more roles available than workers to fill them. Because public finance is all-encompassing, opportunities exist for people with all backgrounds and experience levels interested in the field.

Public finance professionals work with federal, state, or local finance ministries to oversee financial policies, handle taxation processes, assess risk, and design subsidies. For example, a financial controller might work for the government, analysing and preparing budgets and reports. You’ll typically need an accounting or finance degree to pursue this or other public finance positions. Other options include studying business administration or commerce. You may also consider certifications, such as the chartered financial analyst credential, to add supporting evidence of your skills to your CV. 

Internships can also offer an excellent chance to develop skills and get CV-building professional experience. Freshers can apply for entry-level positions that provide knowledge and an introduction to the field.

Learn more with Coursera

Public finance is a wide-ranging industry whose scope covers many facets of successfully managing money within a government’s many levels. Due to its expanding nature, which covers everything from tax collection to budgeting and economic stabilisation, you’ll find many different opportunities to explore a career within this field that fits your passions, interests, and experiences. 

Discover more about the world of public finance with high-quality programmes on Coursera. With options such as The University of Illinois’ Introduction to Finance: The Basics, you’ll have the chance to learn about the foundations of finance and what a career in public finance might look like. You might also consider, Think Like a CFO Specialisation, a four-course programme from the IESE Business School that can help you develop management accounting, financial risk, evaluation, and financial analysis skills.