Question

Discuss the present pattern and growth of public expenditure in india and changes took place in this field recently

Answer 1

All the head of expenditure is the combined revenue and capital

expenditure of the centre, states and Union Territories and have been proposed

to be analyzed at both current and constant prices. Comparison of per capita

expenditure has also been undertaken.

The growth of expenditure has been analysed with the help of some

measure of growth. These are - (i) compound growth rate of expenditure with

respect to time and (ii) the elasticity of expenditure with respect to national

income.

In the past governments restricted themselves to the problems of

maintenance of law and order and external defence. This was due to the

mistaken belief of the maxim of Adam Smith. But J.M. Keynes's 'General Theory'

provides a theoretical basis for the recent developments in public expenditure

programmes assumed by the government. The tendency of a persistent and

continuous increase in public expenditure in countries all over the world was

widely observed in the 191

h century. The emergence and extension of public

sector or organization have become unavoidable on account of the severe

shortcomings of the private sectors which were witnessed during the period of

depression in the thirties and therefore, the restricted concept of state has given