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    3-(a)GOVERNMENT EXPENDITURE POLICY

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    3-(a)GOVERNMENT EXPENDITURE POLICY

    Uploaded by

    mpangalladickson01
    1 views10 pages

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    1 views10 pages

    3-(a)GOVERNMENT EXPENDITURE POLICY

    Uploaded by

    mpangalladickson01

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    PUBLIC EXPENDITURE

    GOVERNMENT EXPENDITURE

    BAC II
    Meaning
    Government or public expenditure can be defined as the
    spending by public authorities like central, state and local
    authorities on various activities for achieving social and
    economic objectives.

    Policy is a course or principle of action adopted or


    proposed by government /individual.
    Institutions and Instruments Involved in Implementation of
    Expenditure Policy
    1.Parliament
    In a parliamentary democracy, leaders, parties and
    candidates for key presidential positions, cabinet
    membership, parliamentary seats or local government
    positions have to present plans in the form of papers,
    presentations, and arguments in debate and in published
    manifestos. Once elected, these leaders, cabinet ministries,
    etc. and later communications provide a mandate for the
    government in power to operate including many aspects that
    impact on public spending.
    Institutions and Instruments …….……………………..continues
    Executive
    These includes ministry and departments. Ministries are
    particularly important in providing policy advice and
    support to government through working on proposals
    given to them and putting proposals forward that support
    government policy. All MDAs and state bodies have
    budgets with a variety of funding and revenue streams
    and expenditure plans.

    Audit
    Audit plays a key part in ensuring spending is properly
    authorised and reflects decisions made through budgets
    laws and regulations as well as statutory obligations.
    Classification of government expenditure
    Administratively

    This classification is based on the terms of


    who is responsible for the expenditure and
    by implication the activities that drive it.
    Responsible Example of
    government
    expenditure
    Local Government Primary education,
    local health
    service ,etc
    Central government Defence, providing
    Classification of government expenditure
    Functionally
    This classification is based on the terms of what the
    spending has been upon. Therefore the total public
    expenditure of an economy is split up based on the
    nature of services provided i.e. the total expenditure is
    split into defence expenditure, national highways
    expenditure, total local health services etc.
    Classification of government expenditure
    Economically
    This classification is based on the terms of its purpose such as
    infrastructure, social, health or other policy purpose. Therefore the total
    expenditure of the economy will be split up in this way.
    (a) Recurrent expenditure
    is expenditure incurred for the day to day
    operations
    of the government like salaries and wages of
    employees and other overheads,
    healthcare services, education etc.
    (b) Development expenditure
    is expenditure incurred towards improving
    infrastructure like roads, bridges, supply of
    electricity and water etc.
    Principle of Public Expenditure

    The main principles of public expenditure are:


    Flexibility:
    it is necessary that an element of flexibility exists so that expenditure can be
    varied according to needs and circumstances

    Economy:
    public expenditure has to ensure economy, i.e. all wasteful and unprofitable
    expenditure has to be avoided. It should be ensured that the tax-payer is not
    burdened to the extent that his savings are affected.

    Maximum social benefit:


    it is necessary that all public expenditure be utilised for the general welfare of
    the society at large, and not for the benefit of a particular section of the society.

    Approved expenditure:
    it is necessary to ensure that public expenditure is approved by a competent
    authority and that funds are used for the purpose for which they were approved.
    .
    Factors Affecting Size and Growth of Public Expenditure
     Growing Population
     Security status
     Interest Payments
     Subsidies
     Administration
     Growth of Transport and Communication
     Poverty Alleviation Programmes
     Development of Agriculture
    END

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