Money Banking and Public Finance

Unit I — Theory of money

The concept of money, functions of money, the evolution of money, monetary standards- meaning and types of monetary standards: the gold standard, Bimetallism, Gresham’s Law, Paper Currency Standard and Standard System of Note Issue.

Unit II — Value of Money and Inflation

Value of Money- Demand for money and supply of money, Quantity Theory of Money (QTM), Inflation-concept, causes, types, measurement and remedies.

Unit III — Commercial Banking

Meaning, functions of commercial banks, the balance sheet of commercial banks, role of commercial banks in developing country, organization and structure of commercial banks, credit creation and commercial bank policies and principles, Banking Regulation Act, 1949, Nationalization of commercial banks, Pre and Post Nationalization – banking crisis and mitigation

• Introduction — Concept of Banking
• Structure of Indian Banking system
• Types of Common Banking Institutions
• Banking Regulation Act, 1949

Unit IV — Central Banking

Introduction, Difference between central bank and commercial bank, functions of the Central bank–models of central banking–quantitative and qualitative credit control mechanism– monetary policy, objectives and limitations – role of RBI

• RBI rules & Notifications (Banking) 1949
• Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)

Unit V — Public Finance

Meaning of public finance, public and private finance, Public revenue-sources of public revenue, Public expenditure-theories of public expenditure, principles of public expenditure, Public debt classification, advantages of public debt, burden of public debt, repayment of public debt.

• Sources of Public Revenue
• Public Expenditure — Classification and Causes of growth of Public Expenditure

Unit VI — Principles of taxation

Meaning of taxation, characteristics of good tax system, classification of tax, direct and indirect – types and methods – some important principles of taxation, cannons of taxation – tax incentives and double taxation relief.

• Indian Tax Structure — Direct and Indirect Taxes
• Nature and Scope of Tax

Unit VII — Fiscal Policy and Budget

Objectives of fiscal policy, the role of fiscal policy in economic development, tools of fiscal policy, fiscal policy vs. monetary policy, Budget- meaning, various types of budget, review of India’s latest Union Budget.

Unit VIII — Economics of the Public Sector

Externalities and market inefficiency: types of externalities, public policies towards externalities, public goods and common resources: different types of good, tragedy of commons.