The State attempts to oversee, as exemplified by Art. 39 (b) and (c) of our Constitution, that private activities may not cause harm to the common good and in case they do so corrective actions are taken by the State. The government does therefore intervene in a variety of matters, economic and non-economic. But concern of Public Economics is largely intervention into economic sphere much beyond fiscal politics as the sphere of economics is enlarging by day because, for instance, many environmental problems are being discovered to have economic implications. Yet Public Economics may also concern with the problems and pitfalls of public intervention as such or its particular forms.
Government should intervene in the economy is today a foregone conclusion but the manner in which and the extent to which it should continue to be an issue. It is needless to say that exact complexion of intervention will a great deal depend on the complexion of the economy as well as on people's choice (and perhaps the manner in which people choose to make the choice or are made to make the choice). Yet, it is broadly agreed that the government intervenes in the economy for influencing the allocation of resources between activities, keeping in view the present and the future, the distribution of resources between individuals and their collectivities, keeping in view again the present generation and the future generations. This is in the long run interest of the society. However, intervention may be needed for stabilizing certain parameters like growth, unemployment, prices, foreign exchange, etc. so that the economy does not get drifted away from its desired course. This became duly recognized in literature after Keynes though various States did come to rescue whenever people were in distress.
Should the intervention be direct by undertaking- owning, controlling and managing- a particular activity or somewhat direct through regulating it or indirect through tax-subsidy mechanism or even how much direct? The answer varies from society to society and changes in any society with changes in internal and external environment and mutation in technological innovations and institutional complexion.