{"id":12920,"date":"2021-12-18T11:56:31","date_gmt":"2021-12-18T06:26:31","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=12920"},"modified":"2024-09-07T15:00:15","modified_gmt":"2024-09-07T09:30:15","slug":"what-is-public-expenditure","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/","title":{"rendered":"What is Public Expenditure? | Free Economic Blogs"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d54c9aaf3e5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d54c9aaf3e5\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#What_is_Public_Expenditure\" >What is Public Expenditure?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#What_is_Public_Expenditure-2\" >What is Public Expenditure?<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#Classification_of_Public_Expenditure\" >Classification of Public Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#A_Revenue_Expenditure\" >A) Revenue Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#B_Capital_Expenditure\" >B) Capital Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#C_Developmental_Expenditure\" >C) Developmental Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#D_Non-Developmental_Expenditure\" >D) Non-Developmental Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#E_Productive_Expenditure\" >E) Productive Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#F_Unproductive_Expenditure\" >F) Unproductive Expenditure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#G_Plan_Expenditures\" >G) Plan Expenditures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/scholarsclasses.com\/blog\/what-is-public-expenditure\/#H_Non-Plan_Expenditures\" >H) Non-Plan Expenditures<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"has-text-align-center has-black-color has-text-color wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Public_Expenditure\"><\/span>What is Public Expenditure?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/What-is-Public-Expenditure-1024x576.jpg\" alt=\"What is Public Expenditure?\" class=\"wp-image-12924 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/What-is-Public-Expenditure-1024x576.jpg 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/What-is-Public-Expenditure-300x169.jpg 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/What-is-Public-Expenditure-768x432.jpg 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/What-is-Public-Expenditure-1536x864.jpg 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/What-is-Public-Expenditure-640x360.jpg 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/What-is-Public-Expenditure.jpg 1920w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><figcaption><strong>What is Public Expenditure?<\/strong><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Public_Expenditure-2\"><\/span><strong><strong><strong>What is Public Expenditure?<\/strong><\/strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The term public expenditure refers to the expenses of public authorities like the Central, state and local governments. Public expenditure occupies a very important place in the study of public finance. It is the end of all financial activities of the government. Public expenditure is incurred basically to maximize social welfare<\/p>\n\n\n\n<p>Public expenditure is that expenditure which is incurred by the public authority [Central, State, and Local Bodies] for the protection of their citizens, for satisfying their collective needs, and for promoting their economic and social welfare. Till the 20th century, the majority of the governments had adopted a policy of laissez-faire. <\/p>\n\n\n\n<p>Under this policy, the functions of government were restricted to obligatory functions. But, modern governments not only perform obligatory functions such as defence and civil administration but also perform optional functions for promoting the social and economic development of their countries. Therefore, the study of public expenditure is an important part of the study of public finance.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"https:\/\/scholarsclasses.com\/blog\/microeconomic-definition\/\" target=\"_blank\" rel=\"noreferrer noopener\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/microeconomic-definition\/\"><strong>Microeconomic Definition | Historical Review of Microeconomics<\/strong><\/a><\/li><li><a href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/\" rel=\"noreferrer noopener\"><strong>Scope Or Nature of Microeconomics<\/strong><\/a><\/li><li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/features-of-microeconomics\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/features-of-microeconomics\/\" rel=\"noreferrer noopener\">Features of Microeconomics<\/a><\/strong><\/li><li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/importance-of-microeconomics\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/importance-of-microeconomics\/\" rel=\"noreferrer noopener\">Importance of Microeconomics<\/a><\/strong><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Classification_of_Public_Expenditure\"><\/span>Classification of Public Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Different economists have classified public expenditure on different bases. We shall now study some of the important classifications of public expenditure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_Revenue_Expenditure\"><\/span>A) Revenue Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Revenue expenditure of the government is for incurred carrying out day-to-day functions of the government departments and various services. It is incurred regularly. For example, administration costs of the government, salaries, allowances and pensions of government employees, medical and public health services, etc.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"B_Capital_Expenditure\"><\/span>B) Capital Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Capital expenditure of the government is expenditure for the progress and development of the country. For example, huge investments in different development projects, loans granted to the state governments and government companies, repayment of government loans, etc.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"C_Developmental_Expenditure\"><\/span>C) Developmental Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Developmental expenditure is productive in nature. The expenditure which results in the generation of employment, increase in production, price stability, etc. is known as a developmental expenditure. For example, expenditure on health, education, industrial development, social welfare, Research and Development (R &amp; D) etc.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"D_Non-Developmental_Expenditure\"><\/span>D) Non-Developmental Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>On the other hand, that government expenditure that does not yield any direct productive impact on the country is called non-developmental expenditure. For example, administration costs, war expenditure, etc.<br>These are unproductive in nature.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"E_Productive_Expenditure\"><\/span>E) Productive Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Expenditure on infrastructure development, public enterprises or development of agriculture increase productive capacity in the economy and bring income to the government through tax and non-tax revenues. Thus they are classified as a productive expenditure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"F_Unproductive_Expenditure\"><\/span>F) Unproductive Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Expenditures in the nature of consumption, such as defence, interest payments, expenditure on law and order, public administration do not create any productive asset which can bring income or returns to the government. Such expenses are classified as unproductive expenditures.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"G_Plan_Expenditures\"><\/span>G) Plan Expenditures<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Refer to the spending of the annual funds allocated by the Central government for development schemes outlined in the ongoing Five Year Plan. For example: Industrial Development, Agricultural Development, Infrastructure, Education &amp; Health etc.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"H_Non-Plan_Expenditures\"><\/span>H) Non-Plan Expenditures<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Include all those expenditures of the government that are not included in the ongoing Five-Year Plan. They include both development and non-development expenditure. Part of the expenditure is obligatory in nature e.g. interest payments, pensions etc. and a part is essential obligation e.g. defence and internal security.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/importance-of-law-of-diminishing-marginal-utility\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/importance-of-law-of-diminishing-marginal-utility\/\" rel=\"noreferrer noopener\">Importance of Law of Diminishing Marginal Utility<\/a><\/strong><\/li><li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/utility-in-economics-meaning-concepts\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/utility-in-economics-meaning-concepts\/\" rel=\"noreferrer noopener\">Utility in Economics ( Concepts of Utility )<\/a><\/strong><\/li><li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/features-of-utility\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/features-of-utility\/\" rel=\"noreferrer noopener\">Features of Utility<\/a><\/strong><\/li><li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/types-of-utility\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/types-of-utility\/\" rel=\"noreferrer noopener\">Factors Influencing the Elasticity of Demand<\/a><\/strong><\/li><\/ul>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":12924,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[10,1],"tags":[4190],"class_list":["post-12920","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-educational-blogs","category-misc","tag-what-is-public-expenditure-2"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12920","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=12920"}],"version-history":[{"count":1,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12920\/revisions"}],"predecessor-version":[{"id":32832,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12920\/revisions\/32832"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/12924"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=12920"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=12920"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=12920"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}