{"id":12926,"date":"2021-12-19T11:57:05","date_gmt":"2021-12-19T06:27:05","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=12926"},"modified":"2024-12-25T18:05:07","modified_gmt":"2024-12-25T12:35:07","slug":"principles-of-public-expenditure","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/principles-of-public-expenditure\/","title":{"rendered":"Principles of 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-69d4de0e1c351\" 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-69d4de0e1c351\"  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\/principles-of-public-expenditure\/#Principles_of_Public_Expenditure\" >Principles of 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\/principles-of-public-expenditure\/#What_is_Public_Expenditure\" >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\/principles-of-public-expenditure\/#Principles_of_Public_Expenditure-2\" >Principles 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\/principles-of-public-expenditure\/#A_Canon_of_Economy\" >A) Canon of Economy<\/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\/principles-of-public-expenditure\/#B_Canon_of_Sanction\" >B) Canon of Sanction<\/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\/principles-of-public-expenditure\/#C_Canon_of_Elasticity\" >C) Canon of Elasticity<\/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\/principles-of-public-expenditure\/#D_Principle_of_Surplus\" >D) Principle of Surplus<\/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\/principles-of-public-expenditure\/#E_Principle_of_Maximum_Social_Benefit\" >E) Principle of Maximum Social Benefit<\/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\/principles-of-public-expenditure\/#F_No_Adverse_Influence_on_Production_or_Distribution\" >F) No Adverse Influence on Production or Distribution<\/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=\"Principles_of_Public_Expenditure\"><\/span>Principles of 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\/Principles-of-Public-Expenditure-1024x576.jpg\" alt=\"Principles of Public Expenditure\" class=\"wp-image-12945 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Principles-of-Public-Expenditure-1024x576.jpg 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Principles-of-Public-Expenditure-300x169.jpg 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Principles-of-Public-Expenditure-768x432.jpg 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Principles-of-Public-Expenditure-1536x864.jpg 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Principles-of-Public-Expenditure-640x360.jpg 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Principles-of-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;\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Public_Expenditure\"><\/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=\"Principles_of_Public_Expenditure-2\"><\/span>Principles of Public Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_Canon_of_Economy\"><\/span>A) Canon of Economy<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Although the aim of public expenditure is to maximize the social benefit, yet it does not exonerate the government from exercising the utmost economy in its expenditure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"B_Canon_of_Sanction\"><\/span>B) Canon of Sanction<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Another important principle of public expenditure is that before it is actually incurred it should be sanctioned by a competent authority. Unauthorized spending is bound to lead to extravagance and over-spending.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"C_Canon_of_Elasticity\"><\/span>C) Canon of Elasticity<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Another sane principle of public expenditure is that it should be fairly elastic. It should be possible for public authorities to vary the expenditure according to need or circumstances.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"D_Principle_of_Surplus\"><\/span>D) Principle of Surplus<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is considered a sound or orthodox principle of public expenditure that as far as possible public expenditure should be kept well within the revenue of the State so that a surplus is left at the end of the year.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"E_Principle_of_Maximum_Social_Benefit\"><\/span>E) Principle of Maximum Social Benefit<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is necessary that all public expenditure should satisfy one fundamental test, viz., that of Maximum Social Advantage. That is, the government should discover and maintain an optimum level of public expenditure by balancing social benefits and social costs<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"F_No_Adverse_Influence_on_Production_or_Distribution\"><\/span>F) No Adverse Influence on Production or Distribution<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is also necessary to ensure that public expenditure should exercise a healthy influence both on the production and distribution of wealth in the community. It should stimulate productive activity so that income and employment of the living.<\/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":12945,"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":[4212],"class_list":["post-12926","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-educational-blogs","category-misc","tag-principles-of-public-expenditure"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12926","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=12926"}],"version-history":[{"count":3,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12926\/revisions"}],"predecessor-version":[{"id":35831,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12926\/revisions\/35831"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/12945"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=12926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=12926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=12926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}