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- Understanding Finance
Finance is the lifeblood of very business. As personnel and materials
which are necessary for the functioning of any office, industry,
enterprise can be made available through money. Hence, finance plays
an important role in the business. Socio-economic forces unleashed by
industrial revolution have given a new meaning and dynamic content to
Meaning of Financial Administration
The term Financial Administration consists of two words. 'Finance' and 'Administration'. The word 'administration' refers to organization and management of collective human efforts in the pursuit of a conscious objective. The word 'finance' refers to monetary resource. Financial administration refers to a set of activities which are related to making available money to the various branches of an organization to enable it to carry out its objects. Whether it is a family, business or a government department, its day to day activities depend on the availability of funds with which financial administration is concerned.
Definitions of Financial Administration.
According to L. D. White "Fiscal Management includes those operations designed to make funds available to officials and to ensure their lawful and efficient use."
According to Jaze Gaston "Financial Administration is that part of government organization which deals with the collection, preservation and distribution of public funds, with the coordination of public revenue and expenditure, with the management of credit operations on behalf of the State and with the general control of the financial affairs of public household".
Even though these definitions covers some important aspects of fiscal management, it fails to project a comprehensive scope of financial administration. G. S. Lall states that financial administration is concerned with all the aspects of financial management of the State. Since public administration is more and more concerned with public affairs and public interest, the frontiers of financial administration are expanding and therefore there is a need for a comprehensive definition of financial administration. As an attempt towards this direction, the following definition is presented:
"Financial Administration includes all the activities which generate, regulate and distribute monetary resources needed for the sustenance and growth of the members of a political community."
Importance of Financial Administration
The importance of Financial Administration was not considered till the industrial revolution. When social life became more complex as a result of industrial revolution, the role of the government increased manifold. Further, the welfare state has caused phenomenal increase in state activity. The governments have entered into new areas which were kept out of the preview of the State. In this changed context, financial administration has gained greater significance for exploring ways and means to generate resources to meet the ever-increasing public expenditure.