What Is Public Expenditure ?

-

 What is Public Expenditure?

Public Expenditure, as the name signifies is the expenses that the government of different levels, i.e. central, state or local bodies, incurs either for its own maintenance or for meeting the common needs of the citizens or for promoting economic and social welfare

For Instance: Expenditure to run government effectively by public authority be it expenditure on administrative purposes or for maintenance of law and order in the area. Moreover, the expenditure made to provide public utility services like education, public recreation, public works, public transportation, defence and so forth are some common examples of public expenditure.

Also, the government carries out multiple social and economic programmes, projects and schemes for which it incurs public expenditure. This may include:
 
(1) Social Security to the public in the form of old age pensions.
(2) Economic and social overheads like transportation, communication,                electricity etc
(3) Maintaining economic stability
(4) Welfare schemes related to education medical and housing
(5) Economic development


Types Of Public Expenditure :-




Direct Expenditure:-

The expenditure that which government incurs to purchase goods and services, as well as on current services of inputs is direct expenditures. Alternatively, we call it exhaustive or non-transfer expenditure. The goods and services are utilized for the purpose of consumption or investment

Expenditure on defence, civil services, educational services, post office, judiciary, health etc fall under this category.

Transfer Expenditure:-

Expenditures in the form of payment without corresponding return are transfer expenditures. This may include payment of interest on government debt, old age pension, sickness benefits etc.

Developmental Expenditure:-

Those expenditures which government incurs on the economic and social development of the nation such as education, health, research, infrastructure, agriculture, transport and communication, etc

Non-developmental expenditure:-

The expenditure that the government incurs on the non-developmental work of the government falls in this category. This may include the supply of essential services like police, defence, administration of justice, interest payments, pension and retirement benefits, etc.

Productive Expenditure:-

Expenditures to improve the economy’s productive efficiency, i.e. they are just like investments, are productive expenditures. This may include the purchase of physical assets like machinery, factories and human capital like education, training and health

Unproductive Expenditure:-

Such expenditures which do not improve the productive efficiency of the government are considered to hear. Therefore, they are just like consumption. It includes expenditure made on administration, defence, security, and maintenance of law and order. These indirectly improve the health and efficiency of the economy.





Comments

Post a Comment

Popular posts from this blog

Features of public finance

-
 Features of public finance.;-  Public finance refers to the management of government revenue, expenditure, and debt. It involves the use of various tools and techniques to ensure efficient and effective allocation of resources in the public sector. Here are some key features of public finance: 1. Revenue collection: Public finance involves the collection of revenue through various means, such as taxes, fees, fines, and other charges. The government uses this revenue to fund public goods and services and meet its financial obligations. 2. Budgeting: Public finance involves the preparation and implementation of government budgets. Budgeting includes estimating revenue, allocating funds to different sectors, and setting expenditure priorities based on the government's objectives and the needs of the society. 3. Expenditure management: Public finance focuses on the management of government expenditure. This involves planning, controlling, and evaluating government spending to ens...
Read more

Individual tax

-
Image
                                 INDIVIDUAL TAX. Individual tax refers to the taxes levied on the income and assets of individuals by the government. It is a form of taxation that applies to the earnings and financial activities of individual taxpayers, including wages, salaries, investment income, and other sources of personal income. Individual tax systems vary across countries, but they typically involve the following components:- 1. Income Tax: This is the most common form of individual tax and is imposed on the income earned by individuals. It can be progressive, meaning that higher income levels are subject to higher tax rates, or it can have a flat rate that applies to all income levels equally. 2. Capital Gains Tax: This tax is applied to the profits generated from the sale of certain assets, such as stocks, bonds, real estate, or valuable personal property. The tax rate may vary based on the ho...
Read more

Finance Is Needed In Every Industry For Several Reasons:

-
  Finance is needed in every industry for several reasons: 1. Capital investment: Finance is essential for industries to make capital investments in machinery, equipment, technology, infrastructure, and other assets necessary for production and operations. It enables industries to acquire the resources they need to establish and expand their operations. 2. Working capital management: Industries require finance to manage their day-to-day operations and ensure smooth functioning. This includes managing cash flow, accounts payable, accounts receivable, inventory, and other short-term financial obligations. Adequate working capital ensures that industries can meet their operational expenses and maintain a healthy financial position. 3. Research and development: Finance is crucial for industries involved in research and development activities. It provides funding for innovation, product development, and technological advancements. Industries need finance to conduct research, prototype t...
Read more