Public finance and fiscal policy determines a country’s progress. Public finance is the branch of economics that relates to public income, public expenditure and public debt. It is presented through the budget. Fiscal policy is the government policy regarding public revenue, public expenditure and public debt.

These policies are implemented through the budget. Fiscal policy influences a countries progress. A sound fiscal policy helps in nourishing the developmental activities and to attain growth.

Fispal policy controls inflation and deflation which affect economic security. The tax rate is increased when there is inflation. As a result of this, the purchasing power of the people falls. Similarly tax is reduced at the time of deflation. That will increase purchasing power of the people. As a result the demand for products increases. This results in an increase in the price of the products. The timely application of fiscal policy helps the government to over-come such situations.