Question

Explain various reasons for the growth of public expenditure.
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Answer 1

Answer:

Reasons for the growth of public expenditure in India:

(i) Development Programmes: Most of the underdeveloped countries have initiated various programmes of economic development i.e. provision of infrastructure of the economy such as transport, communication power etc. This has led to growth of public expenditure.

(ii) Growing trend of Urbanisation: With the spread of urbanization, public expenditure has increased in modern times. Urbanization has led to increase in Government expenditures on civil administration, education, public health, water supply, parks etc.

(iii) Rise in Price-level: As a result of the rise in the price-level, the public expenditure has gone up everywhere. The reason is that like the private individuals the Government also has to buy goods and services from the market at higher prices.

(iv) Increase in Population: As a result, the Government has to incur great expenditure to meet the requirements of increasing population. In fact, the public expenditure increases in the same ratio in which the population increases.

(v) Welfare State: The modern state is a welfare state. It has to spend increasing amounts on such items as social insurance, unemployment, relief, free medical aid, free education etc. to improve the socio-economic welfare of the country.

Answer 2

Public expenditure refers to the expenses incurred by the government for the betterment of the public.

Explanation:

1. Public expenditure is the expense of the government which is the result of all the activities undertaken for the betterment of the citizens.
2. There is a trend of increasing public expenditure every year.
3. This is basically due to a large number of developmental activities and projects undertaken for progress.
4. Moreover, public expenditure also involves expenditure in unforeseen circumstances such as natural disasters.
5. Due to global warming, many disasters occur. The government has to spend huge amounts of money for restoring the places damaged by these disasters and providing relief to the victims.