Question

.Why do the modern governments spend a lot of money on different activities without earning profit 3 points​

Answer 1

Answer:

Why do modern governments spend a lot of money on different activities without earning profit? ... These are for public utility and so the government takes the responsibility of doing it. 3. Moreover, providing health facilities and education is also the duty of the government.

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Answer 2

The reasons are as given below:

(i) Welfare of the people : The modern state is a welfare state that looks after the interests of its citizens. People pay different types of taxes and expect the government to follow policies for the Welfare of the people. So, generally those activities which do not generate profit and are not taken up by the private sector, are taken up by the government or the public sector. Thus, services like Railways or Posts and Telegraphs are provided by the government.

(ii) Large expenditure: Some activities like construction of roads etc. need large sum of expenditure which cannot be borne by the private sector. So, the government takes up such activities in the interest of the people in a democracy’.

(iii) Some activities that need support of the government : There are some activities that need support of the government in the form of subsidy such as provision of food grains for the poor through ration shops. The government buys wheat, paddy etc. at a higher price but sells at a lower price at ‘ration shops’. Such activities cannot be taken up by the private sector.

(iv) Duty of the government ; It is the duty of the government to raise the standard of living of the people. It should make arrangements for quality education and health services in order to take care of the poorest of the poor and most ignored regions of the country. Thus, the government takes up various activities and spends a lot of expenditure on them.