principles which should govern public expenditure and bring out their implications

The main principles or canons which should govern public expenditure as follows:

1.         The principle of Maximum Social Advantage: The government expenditure should be incurred in such a way that it should give benefit to the community as a whole. The aim of the public expenditure is the provision of maximum social advantage. If one section of the society or one particular group receives benefit of the public expenditure at the expense of the society as a whole, then that expenditure cannot be justified in any way, because it does not result in the greatest good to the public in general. So we can say that the public expenditure should secure the maximum social advantage.

2.         The Principle of Economy: The principle of economy requires that government should spend money in such a manner that all wasteful expenditure is avoided. Economy does not mean miserliness or niggardliness. By economy we mean that public expenditure should be increased without any extravagance and duplication. If the hard earned money of the people, collected through taxes, is thoughtlessly spent the public expenditure will not confirm to the canon of economy.

3.         Principeof Sanction: According to the principle all public expenditure should be incurred by getting prior sanction from the competent authority. The sanction is necessary because it helps in a voiding waste, extravagance, and overlapping of public money. Moreover, prior approval of the public expenditure makes it easy for the audit department to scrutinize the different items of expenditure and see whether the money has not been overspent or misappropriated.

4.         Principle of Balanced Budgets: Every government must try to keep its budgets well balanced. There should be neither ever recurring surpluses nor deficits in the budgets. Ever recurring surpluses are not desired because it shows that people are unnecessarily heavily taxed. If expenditure exceeds revenue every year, then that too is not a healthy sign because this is considered to be the sign of financial weakness of the country. The government therefore must try to live with in its own means.

5.         The Principle of Elasticity: The principle of elasticity requires that public expenditure should not in any way be rigidly fixed for all times. It should be rather fairly elastic. The public authorities should be in a position to vary the expenditure as the situation demands. During the period of depression, it should be possible for the government to increase the expenditure so that economy is lifted from low level of employment. During boom period, the state should be in a position to curtail the expenditure without causing any distress to the people.

6.         No Unhealthy Effect on Production and Distribution: The public expenditure should be arranged in such a way that it should not have adverse effect on production or distribution in the country. Public expenditure should aim at stimulating production and reducing inequalities of wealth distribution. If due to unwise public spending wealth gets concentrated in a few hands, then its purpose is not served. The money really goes waste then.

Discuss the role of state in economic activity

The role of the state in economic affairs is a complex and controversial topic. The political thinkers are divided about the extent and mode of state interference in economic activity. The Anarchists hold the view that a day will come when people will be lifted so much morally that there would be no need of government at all. The society will be so much conscious of its duties that it will regulate its affairs itself. The view of the Anarchists seems to be only a dream and wishful thinking and is not likely to be realized at any stage.

The Mercentillists believe that the state should actively participate in the social and economic spheres. The Physiocrates were the view that the state should not impose any artificial barriers on individual’s economic behaviour. They believe in the law of Nature.

Adam Smith, the father of Political Economy, believes that the state should not interfere in the internal economic life of the citizens of a country as it hampers economic progress. He advocates the doctrine of non-interference or laissez-faire Adam Smith, however justifies certain cases in which state interference is necessary. They are (i) defence of the country (ii) expenses on administration to safeguard the legitimate rights of the citizens and (iii) free education for needy students.

The Communist on the other hold, the opposite view. The advocate that state should own all factors of production. The decisions of what to produce, how much to produce and for whom to produce should all be carried out by the state. The state, in other words, should have minute supervision on the economic activities of the individuals. They believe firmly that there should not be any individual economic liberty, because it leads to exploitation of the poor by the rich. Moreover, the policy of non-interference causes widespread business fluctuation and mass unemployment in the country. So they say why to involve ourselves in such distress and misery? They, therefore strongly advocate complete state control in social and economic spheres.

In between these two extremes view held by Adam Smith and the communists, the modern capitalist government have struck a happy mean. The state intervenes directly or indirectly in all those economic and social activities where the community as a whole can benefit.

Tattoos For Men

When planning tattoos for men, the two most important decisions to make are choosing a design style, and choosing a location on the body to ink it. Some men prefer to start by choosing a design, and then think about the location later, while other men decide where they want a tattoo, and then search for suitable designs. Neither way is better than the other, and most men consider both the design and the body area simultaneously during the planning process.

There are a huge variety of design styles that make fantastic tattoos for men, and there really is something for everyone. Some of the most popular tattoos for men include Celtic, cross, dolphin, eagle, fish, heart, scorpion, star, tiger, tribal, and zodiac design styles. There are a wide variety of ink colours available, meaning that you can get your chosen design inked in whatever colours you want. It is important to remember however that some of the more traditional designs, such as Celtic and tribal designs, look best inked in black, so if you want a very colourful tattoo these designs are probably not for you.

Wrist Tattoos

Tattoos are more popular these days and more accepted, too, than they used to be. And the number of skilled tattoo artists who can work on you is also great. If you are not sure what kind of tattoo you would like to have, most tattoo parlors can show you books with many designs to choose from. In addition to the design, you also need to choose the part of your body that you would like to have your tattoo on. One particular part of your body is your wrist; it so happens that wrist tattoos are very popular.

If you do, however, wish to have a tattoo on your wrist, you need to take the following advice into consideration:

· More Pain: Getting a tattoo inked is going to involve some pain not matter what part of the body is involved. But it so happens that wrist tattoos are usually more painful than tattoos on any other part of the body. The reason for this is that the skin is thinner on your writs than anywhere else on your body. But on the positive side, tattoo on your wrists are small, so they don't take long to ink them in. So even if the pain is worse, you won't need to put up with it for long.

· Longer Healing Process: Unfortunately, it usually takes wrist tattoos to heal longer. The reason is that this part of your body is rather exposed, so it can take several weeks for a wrist tattoo to heal.

· May Need More Touch Up Work: Because wrists are rather exposed parts of your body, tattoos on your wrist may fade more quickly than on other parts of your body. This means that you may need to have them touched up than if they were on some less exposed part of the body.

· They Are Easy to Hide: Since wrist tattoos are easy to hide, this could be an advantage. A long-sleeve shirt will do the trick. Or even a watch or a bracelet can hide it. Depending on what kind of job you may be looking for, a wrist tattoo is a good option, provided you will remember to hide it.

· Cost is Reasonable: Since wrist tattoos tend to be small, they also cost less than those that go on other parts of your body. Larger and more colorful tattoos tend to cost more. Wrist tattoos are not only small, they usually don't use many colors. One or two is usually all they take.

Body Tattoos

Getting a Tattoo means the Artist has to pierce your skin. That will always involve pain. Irrespective of the size of the tattoo, or even or where it is positioned, you can expect to feel discomfort at the very least though body tattoos are generally less painful than other areas. We all have a different level of pain tolerance, women usually have a higher pain threshold than men, and that pain threshold will dictate how uncomfortable it is regardless of any other factors. The pain is more of a burning or tingling sensation rather than a prolonged discomfort like toothache. In areas which have less tissue, muscle or fat and which are bony, such as feet and wrists, the discomfort may rise to level of real pain. In fact some Tattoo Artists will not work on these areas for just that reason. Unless men have a particularly bony chest that isn't generally a problem. Backs, arms, legs and areas where there is plenty of muscle or a layer of fat will hardly have any discomfort at all.

Finally if it all gets too much and you need to take a break, say so - especially if it is a large tattoo. Your tattoo artist won't mind, they would rather you were comfortable as it makes their job easier. If you need to split it into more than one session , that won't be a problem for most Studios and the nature of a tattoo is such that it doesn't need to be finished all in one go. Body Tattoos are a permanent art form that you have chosen to express your personality - following a few practical steps will make sure it is a relatively pain free experience.

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What is the difference between public finance and private finance

Public finance studies the income-getting and income-spending activities of the public bodies or the state. Private finance deals with the way a private person gets and spends his income. There are certain differences between the principles underlying public finances and those of private finances. These are explained below.

1.         Adjustment of Income and Expenditure: An individual usually adjusts his expenditure to his income. But the public authority generally adjusts its income to its expenditure. In other words, we can say that an individual cuts his coat according to his cloth. While the public authority first decides the size of the coat and then tries to produce cloth according to the size of its coat. The public authority prepares on estimate of the total expenditure to be incurred during a fiscal year and then devices ways and means to raise the required amount. The individual on the other hand tries to live within his own means. His expenditure is generally determined by his income.

2.         Unit of Time: The public authority balances its budget during a given period which is generally a year. For an individual there is no period of time in the course of which the budget must be balanced. The individual generally continues earning and spending without keeping any record of his budget by a particular date. The public authority however has to keep full records of its income and expenditure and the accounts are to be in balance during the financial year.

3.         An individual cannot borrow from himself: If at any time an individual is in need of money, he cannot borrow from himself. He can raise the loan from other individuals or can utilize his past savings, but he cannot borrow internally. The public authority, on the other hand, can borrow internally from its own people and externally from other nations.

4.         Issue of Currency: Government has full control over the issue of currency in the country. No other person except the state can print notes. If an individual does so, he will be put behind the bars.

5.         Provision for the Future: The government has to make a solid provision for the future. It spends large amounts of the money on those projects which the future generation is only to benefit. The individuals on the other hand are not generally liberal and far-sighted. They discount the future at a higher rate and so usually make inadequate provisional for the future.

6.         Big and deliberate changes in public finance: It is easier for the government to make big and deliberate changes in its income, and expenditure but for an individual it is very difficult affair. A few individuals may succeed in increasing their incomes but all the persons cannot do so. The public authority can also make deliberate decrease in its income without feeling any difficulty. But for individuals, reduction in income is very painful as they are used to certain standard of living.

7.         Surplus Budgeting: For an individual, excess of income over expenditure or surplus budgeting is considered to be a virtue but for the public authority it is not as such, it is expected from the government that it should raise only as much revenue as it needs during a calendar year. After all what is the fun of showing persistently surplus budgets? It is not better to give relief to the tax-payer than to show surplus budgets.

8.         Mystery shrouds Individual Finance: Individuals finance is usually shrouded in mystery. Every body likes that his financial position should remain a closely guarded secret but this is not the case with public authorities. The government publishes its budget and gives due publicity to it.

causes of disequilibrium in the balance of payment of any country? Suggest the remedial measures

When the value of imported visible and invisible items of trade exceeds the exported visible and invisible items of trade, the demand for titles to trade exceeds the supply of it, it creates a gap between the receipts and payments which pares the way for the out flow of gold reserves of the foreign exchange reserves of the past had depleted on it forces the country to borrow from abroad which in debits the country. Such a situation is known as disequilibrium in the balance of payment. Temporary and timely short term disequilibrium may not be the source of worry for any country, but the long term disequilibrium is really alarming.

Following are the main causes of disequilibrium.

1)         Deficit in Export: The decline in exports results the decline in foreign exchange earnings. Fall in the exports may be due to geographical reasons i.e. draught, untimely rainfalls, floods, pests, water logging, salinity and soil erosion, shortage of irrigation facilities etc. political reasons i.e. out break of wars, embargo on imports by the foreign countries or the development of home industries and protection by importing countries, cut throat competition in the foreign markets, high cost of production due to the rise in the prices of factors and low quality exports or the discovery of cheap substitutes in the importing countries. Higher domestic consumption due the zooming growth of population or industrialization may also figure among the factors which reduce the volume of exports.

2)         Rise in Imports: Import may shoot up due to geographical, economic, social and political reasons. Economic development necessitates the imports of capital goods and fuel zooming growth of population which forces the country to import food stuff or emergencies like famine or epidemic require the import of necessary goods.

3)         Inflation: The prides of goods and services rise when prevail inflationary conditions in the country. This situation discourages exports and encourages imports.

4)         Depression: During depression the purchasing power of the people falls and the demand for goods declines. The decline in prices results low receipts from abroad.

5)         Terms of Trade: In case of adverse terms of trade the receipts from exports decline where as payments increase. If the rise in prices of exports does not tally with the prices of imports, it creates gap between payments and receipts.

6)         Trade Restrictions: If the importing countries put embargo on the imports of goods from abroad it results decline in exports and consequently adverse balance of payment.

7)         Devaluation: If a country devaluates its currency, its exports become cheaper while the imports become expensive. If the importing country devaluates its country, it surely affects the trade and economy of the exporting country.

8)         Invisible Items: If the burden of foreign loans increases the debt service charges cause disequilibrium in the balance of payment. Similarly if the country is dependant upon others for its banking. Insurance shipping services, its balance of payment is adversely affected.

Remedial Measures

Following remedial measures are suggested.

1)         Devaluation: To rectify the disequilibrium in the balance of payment, the country devaluates its currency which cheapens the exports and makes the import dearer.

2)         Deflation: Central bank implements the monetary, policy and adopts the monetary measures like bank rate policy, open market operation, and credit rationing change sin the reserve and liquidity ratio to deflate the currency and bring down the prices. When the prices fall, they boost up exports. If the quality of exportable goods also improves it further pushes up the exports.

3)         Exchange Central: Under this policy, the exporters are required to surrender the earned foreign exchange to the central bank which in return gives them the local currency. The importers are required to seek the permission before placing on the foreign firm. The central bank grants permission keeping in view the available reserves of the foreign exchange.

4)         IMF: IMF also lends to rectify the disequilibrium in the balance of payment. It also suggests the changes in the rate of exchange to achieve the results.

5)         Proper Utilization of National Resources: Disequilibrium can also be remedied by proper utilization of the national resources through planning, producing the import substitutes, persuading the people to prefer the consumption of home product, adopting simplicity. Import restrictions like license systems quota system; increase in custom duties may also be enforced. Export promotion measures including the introduction of home product in foreign markets after their thorough surveys, bilateral and multilateral trade agreements will help in boosting up exports and rectify the in-balances of the balance of payment.

What do you mean by the terms of balance of trade and balance of payment, Differentiate between the two

Foreign trade means export and import of goods; and goods passing from one country to another have to be paid. The difference between the exports and imports of a country is called the balance of trade. When the value of exports of a country exceeds that of its imports the balance of trade is called favourable or positive. When the value of imports of country exceeds that of its exports, it is called unfavourable or negative balance of trade. The favourable balance of trade of a country enables it to earn gold from foreign countries to the amount of balance. When balance is unfavourable the country has to pay gold to foreign countries. For instance Pakistanexported goods worth Rs. 200 million to Iranand imported goods worth Rs. 150 million from Iran. Pakistanhas a favourable balance of trade with Iran to the amount of Rs. 50 million. The means, Pakistanwould realize this balance from Iranin terms of gold, as ultimately foreign payments are made in terms of gold. Balance of trade is not the true index of the economic position of any country.

A country may have a favourable balance of trade, but may not have favourable balance of accounts. For instance, Pakistanhas normally got the favourable balance of trade. But is doubtful whether she was favourable balance of accounts or payments. Because she has to pay a huge sum to foreign countries on account of the use of foreign ships, aeroplanes, banks, insurances and on account of the study and the travel of Pakistanis in foreign countries and also as interests of foreign capital.

England may have her balance of trade unfavourable. But she gets big sum on invisible items. So normally, her balance of accounts may be favourable.

The difference between “Balance of trade” and “Balance of Payments” should be clear “Balance of Payments” on current accounts refers to the net position of all the “credits” (payments due to a country) and “Debits” (payment made by a country) on account of merchandise, trade, services and un-required transfers. If there is a deficit this is covered by net “inflow” of foreign and in the form of loans; and what is still left is met by monetary movements i.e. short period borrowings and running down of the past accumulated balance of gold and Foreign Exchange Reserves. In the case of surplus these reserves increase in their size.

When we talk of “Balance of Trade” sometimes both goods and services are included. Invisible items are sometimes also called Invisible Trade. But unless this is specifically mentioned “Balance of Trade” means only the balance between Merchandise Trade and Visible Trade i.e. imports and exports of goods. If the value of imports exceeds the value of exports, we say that the balance of trade is unfavourable or is deficit. If the value of exports exceeds the value of imports we say that the balance of trade is favourable or surplus.

Describe the expenditure based approach of GDP measurement

A different perspective on components of GDP is obtained by looking at the expenditure side of the national income accounts. The expenditure approach measures GDP as total spending on final goods and services produced within a country or nation during a specified period of time. Four major categories of spending are added to get GDP i.e. consumption, investment, government purchases of goods and services and net exports of goods and services. In symbols we can describe as

Y = GDP = Total output or product

= Total income

= Total expenditure

C = Consumption

I = Investment

G = Government purchases of goods and services

NX = Net exports of goods and services

With these symbols, we express the expenditure approach to measuring GDP as

Y = C + I + G + NX    ------------------ (1)

This equation is called income-expenditure identity because it states that income Y, equals total expenditure 

C + I + G + NX. Let us discuss the components which constitute the GDP measurement.

A—Consumption

Consumption is spending by domestic households on final goods and services including those produced abroad. It is largest component of expenditure usually accounting for about two thirds of GDP. Consumption expenditure are grouped into three categories.

1. Consumer durables: Consumer goods are long-lived consumer items such as cars, TV’s, furniture and major applications.

2. Nondurable goods: Non durable goods are short-lived items such as food, clothing and fuel.

3. Services: Services such as education, health care, financial services and transportation.

B—Investment

Investment includes both spending for new capital goods called fixed instrument and increases in firms inventory holdings called inventory investment. Fixed investment in turn has two major components.

1. Business of fixed investment: It is spending by business on structures such as factories, warehouses and office buildings and equipments such as machines, vehicles and furniture.

2. Residential investment: It is spending on the construction of new houses and apartment buildings.

C—Government Purchase of Goods and Services

Government purchases of goods and services include any expenditure by the government for a currently produced good or service, foreign or domestic are the third major component of spending.

D—Net Exports

Net exports are exports minus imports. As we know export are goods and services produced within a country that are the goods and services produced abroad that are purchased by country’s residents. Net exports are positive if exports are greater than imports and negative if imports exceed exports.

Exports are added to total spending, because they represent spending by foreigners on final goods and services produced in a country. Imports are subtracted from total spending because consumption, investment and government purchases are defined to include imported goods and services. Subtracting imports ensures that total spending C + I + G + NX reflects spending only on output produced in the country. For example an increase in imports of America means that Americans are buying Japanese cars instead of American cars.

What is Gross Domestic Product (GDP) Explain the different techniques of GDP measurement

Gross Domestic Product (GDP) is the name we give to the total market value of the final goods and services produced within a nation or country during a given period of time. GDPis the most comprehensive measure of a nation’s total output of goods and services. It is the sum of the dollar values of consumption (C) gross Investment (I) government purchase of goods and services (G) and net exports (X) produced within a nation or country during a given period of time say year. In symbols we can express as

GDP = C + I + G + X

GDP is used for many purposes but the most important one is to measure the overall performance of an economy.

Methods to Measure GDP

1.         Product Method of Measuring GDP: The product approach defines a nation’s Gross Domestic Product (GDP) as the market values of final goods and services newly produced within a nation during a fixed period of time.

2.         The Expenditure Method of Measuring GDP: A different perspective on the components of GDP is obtained by looking at the accounts expenditure side of the national income. The expenditure approach measures GDPas total spending on final good and services produced within a nation or country daring a specified period of time. Four major categories of spending are added to get GDP i.e. consumption, investment, purchase of goods and services and net exports of goods and services. In symbols we can express as

Y = C + I + G + NX

Y = GDP = Total Production (or output)

= Total Income

= Total Expenditure

C = Consumption

I = Investment

G = Government purchase of goods and services

NX = Net exports of goods and services

Above equation is the one of basic relationship in macroeconomics and this equation is called the income-expenditure identity because it states that income Y, equals total expenditure

C + I + G + NX

3.         The Income Method of Measuring GDP: The third and final way to measure GDP is the income approach. It calculates GDP by adding the income received by producers including profits and taxes paid to the government. A key part of the income approach is concept known as national income. National income is the sum of five types of income i.e. compensation of employees, proprietor’s income, rental income of persons, corporate profits and net interest.

Koi Tattoos

The popularity of Koi tattoos is growing everyday. So what makes these brightly colored fish so popular? Many just like their ornamental beauty and bold colors, while others choose a koi because of the symbolism that it represents. So what does this magnificent fish represent?

Koi originated in China and they were introduced into Japan in the 1800's. According to Chinese legend, it is believed that if a koi succeeded in climbing the Yellow River falls to "Dragon's Gate" then it would be transformed into a dragon. This symbolizes worldly aspiration and advancement. In Japan they are considered a manly symbol and according to legend, if a koi climbs the waterfall bravely, and if they are caught, they will lay on the cutting board completely still facing their death bravely just as a samurai would. Based on that legend, the Japanese associate koi with perseverance and strength.

Koi fish are very powerful and energetic and they can swim against the current to reach food or spawning ground. This fact also has bearing on whether people have their koi tattoo swimming up or down. It is said that if the fish is swimming upstream then you have overcome a hardship during trying times. If it is swimming down, then you are struggling with a hardship. However others translate this to mean that a koi tattoo swimming upstream represents a very independent person that has very little concern for what others think. You would rather be your own person and face the challenge of swimming against a hard current than to conform to the rules of society. This is an act of power and you cannot be deterred by anything.

Koi symbolism is also associated with:

Good luck

Wealth

Bravery

Independence

Masculinity

Power and perseverance

There are many varieties of koi and they vary in color and design. Many people believe that the color of the koi tattoo should be in harmony with you and your surroundings. Some of the more popular breeds and their colors are listed below:

• Asagi - Light blue top surface with red underside
• Bekko - Red, white or yellow with black markings
• Butterfly Koi - These come in many colors but are known for their long fins and slender bodies
• Goshiki - Black background with white, red, brown and light blue markings
• Hikari Moyomono - Two colored fish with one of the colors being metallic
• Kin Gin Rin - Reflective scales make these fish shiny metallic colored
• Kohaku - White with red markings
• Koromo - Ordered scales with blue edges
• Ogon - Single colored
• Showa - Black with red and white
• Taisho Sanshoku or Sanke - White, red and black
• Tancho - White with a red spot on its head
• Utsurimono - Black and red or white or yellow

In addition to their symbolic meanings, these tattoos are some of the most beautiful works of art that you can have on your body. Many people add water, a waterfall or flowers to their design. Another popular alternative is to have two or more koi swimming together. The possibilities are endless, and no matter what the reasoning or symbolism is behind your koi tattoo, this is one design that you will truly love forever.