Question

what are the goals of public expenditure

Answer 1

Earlier it was believed that governments should restrict their involvement in the economy to providing defense and maintaining law and order, rest should be left to the wisdom of the markets which would be able to solve all problems in the long run. During the inter war period of 1920s someone realized that in the long run we all are dead. With the advent of Keynesian economics, the focus shifted towards a greater role of public spending in the economy.

Today public expenditure plays a major role in the economy. For a fixed tax rate, an increasing population leads to higher tax receipts thereby encouraging the government to a more capable role. :-

It aims at maximizing social benefit by collecting excess income of the rich through taxes and mobilizing these funds towards welfare programs to promote the ability of weaker section.Public expenditure on free education, health care and housing aims at increasing the capacity of consumption of the population.At times of instability, public expenditure acts as a control mechanism for money supply and bringing in price stability.Cumulative growth is achieved by means of central planning, public expenditure aims at allocating resources towards backward regions of the country thereby reducing regional inequality and promoting a balanced growth.Public expenditure also acts as an instrument to promote and control specific industries by means of providing incentives towards certain objectives in line with public policy

Answer 2

Answer:

Public expenditure is not a financial process, but rather a means of achieving social goals.

Explanation:

Public expenditure is defined as spending by a country's government on collective needs and desires such as pensions, provisions, security, and infrastructure. Until the nineteenth century, public spending was restricted because laissez faire philosophies believed that money left in private hands would yield greater results.

The goals of public expenditure are:

• Provide social goods
• Remove unemployment
• Increase Production
• Exploitation and Development of Mineral Resources
• Promote Price Stability
• Promote Balanced Growth

1. It is critical to the equitable distribution of money in order to improve the wellbeing of society.
2. Public expenditure is crucial in maintaining police forces, armies, and well-connected suppliers of defence goods, as well as diplomats in foreign countries.
3. Equal attention is paid to the administration of law, order, and justice, as well as the general public.
4. Objects to public debt servicing.
5. It is vital to the development of industries, transportation, and communication, as well as to public health.
6. Its goal is to create social goods.

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