PUBLIC EXPENDITURE AND THE REASONS FOR THE
GROWTH OF PUBLIC EXPENDITURE
Public expenditure refers to the expenditure incurred by
the public authority, i.e.., the government. Classical economists like
Adam Smith believed in laissez-faire. Laissez-faire means least
intervention of the government in economic activities. Under the
laissez-faire system, public expenditure would be very low. Laissez-
faire is an old philosophy. All modern governments interfere in
economic activities. Consequently public expenditure is on the
increase.
Reasons for the growth of Public expenditure
Now-a-days all governments spend huge amounts of money on various
activities. The important reasons for increase in public expenditure are the
following:
1. Welfare state
All modern governments are committed to improvement of welfare
of its citizens. This necessitates huge expenditure on education, public
health, social security measures etc. This pushes up public expenditure.
2. Defence
Expenditure on defence is a major item of public expenditure.
Modern arms and ammunitions are very expensive.
3. Democracy
Democracy is the most widely accepted form of government now.
But democracy is highly expensive. Modern governments incur huge
expenditure on conducting elections, maintaining legislative bodies,
providing security to ministers etc.
GROWTH OF PUBLIC EXPENDITURE
Public expenditure refers to the expenditure incurred by
the public authority, i.e.., the government. Classical economists like
Adam Smith believed in laissez-faire. Laissez-faire means least
intervention of the government in economic activities. Under the
laissez-faire system, public expenditure would be very low. Laissez-
faire is an old philosophy. All modern governments interfere in
economic activities. Consequently public expenditure is on the
increase.
Reasons for the growth of Public expenditure
Now-a-days all governments spend huge amounts of money on various
activities. The important reasons for increase in public expenditure are the
following:
1. Welfare state
All modern governments are committed to improvement of welfare
of its citizens. This necessitates huge expenditure on education, public
health, social security measures etc. This pushes up public expenditure.
2. Defence
Expenditure on defence is a major item of public expenditure.
Modern arms and ammunitions are very expensive.
3. Democracy
Democracy is the most widely accepted form of government now.
But democracy is highly expensive. Modern governments incur huge
expenditure on conducting elections, maintaining legislative bodies,
providing security to ministers etc.
