IMPORTANCE OF FINANCIAL MANAGEMENT

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Importance of financial management

An important aspect of the importance of financial management in public administration is financial administration. It works through the ‘Budget’ tool and surrounds the entire ‘budgetary cycle’. It means- Formulation of Budget, Enactment of Budget, Implementation of Budget, Accounting and Auditing. According to CP Bhambri, “The word in its present sense was first used in 1773 in the satirical work Opening the Budget against Walpole’s financial plan for that year.

Following are the prevailing statements on the importance of financial administration for government administration

Kautilya – “All work is dependent on finances. Therefore, maximum attention should be given to the treasury”.

Hoover Commission – “Financial administration is the ‘heart of modern government”.

Willoughby – “Budget is ‘an integral and essential tool of administration”.

Dimock – “Budget making raises the most policy questions out of all the aspects of financial administration.”

Lloyd George – “Government is finance.”

Morstein Marx – “Finance in administration is as ubiquitous as oxygen in the atmosphere.”

Meaning of Comparative Public Administration

Finance has a very important place in public administration. Administration and finance have the same close relationship as between ‘body’ and ‘blood’ If the administration is the body, then the soul is needed, just as the body needs the soul to run, in the same way finance is needed to keep the administration alive.. Finance is the ‘life blood’ of the administration. In public administration, administration is physical and finance is blood. Just as blood is needed to run the body, in the same way finance is needed to run the administration. Administration is incomplete without finance. Administration and finance are linked to each other like body and its shadow. Money is spent in all administrative functions of the state, because it is necessary to appoint necessary staff for the implementation of administrative functions. In order to run any engine, fuel is required. Similarly, the use of finance as fuel is necessary to run an administrative engine. The earlier operation is impossible without the other. Administration and finance complement each other. Hence, Kautilya has rightly said: “All Udham is dependent on Vita. Therefore, more attention should be paid to the treasury. ” Dr. C.P Bambharya has described the same value of finance in administration as that of oxygen in the atmosphere. Just as organisms need oxygen to breathe, similarly administration requires finance. Pro. L. In the words of D. White, “Administration and finance cannot be separated from each other. Every administrative function has an economic aspect which is indistinguishable from it as man and its shadow. ” According to Willoughby, “the problem of efficient governance is no more important than the financial appreciation of the underlying diverse elements.”

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Financial Management

Financial management has great importance in finance administration. A strong financial system has great importance for governance. The revenue which is also obtained from the poor citizens, therefore it is the duty of the government to spend that money properly, so that every citizen can get its benefits. Due to unskilled financial system, the government keeps away from the people and in the end the existence of the government is in danger. In its absence, the people blame dissipation and other bad things on the democracy itself and the result is that the public starts hating such democracy itself. This type of financial appreciation makes itself destitute in the future of democracy. There is also another thing due to which financial administration has great importance today. Due to the extraordinary increase in government expenditure in modern times, it has become absolutely necessary that the best principles, tools and methods related to financial administration should be developed and should be followed by every government. Affects conduct.