The Theoretical Analysis And Path Selection Of The Public Finance Supporting The Financial Development In Rural Areas

With the economic development, the income level of rural residents continues toincrease. However, with the lagging of China’s rural financial development, reductionof the rural financial networks, massive outflow of rural funds, slow development ofrural financial services, and widespread farmers’ difficulty of obtaining loans, thedevelopment of rural economy is seriously hampered.The natural inferiority and market failure of rural finance require public financeto support the development of rural finance. An important way to expand ruralfinancial aggregates and achieve a healthy development of rural finance is to activelyadopt various means of fiscal policies to activate factors in the development of ruralfinance.In Hunan Province, for example, the current fiscal policy tools are targeted costsubsidies for new institutions, incremental reward for agricultural loans, agriculturalinsurance premium subsidies, and tax preferential policies. Then this paper analyzesthe financial support for the development of rural finance in Hunan Province.Meanwhile, non-parametric test is used in this paper to evaluate and analyze theimpact of rural financial expenditure on Hunan’s rural financial development, and toascertain the effectiveness of policy tools mathematically. Foreign rural financedevelops early and has more experience. It benefits us a lot to further analyze theoverview and fiscal supporting tools of those foreign financial systems that are similarto our rural financial system, such as Germany, Japan and India. Under theconsideration of co-coordinated space, time and financial interaction, leverage offinancial subsidies, preferential tax policies and other fiscal policies should beadopted in order to create a favorable institutional basis, policy environment andorganizational guarantee for the development of rural finance.