{"id":12927,"date":"2021-12-18T12:27:57","date_gmt":"2021-12-18T06:57:57","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=12927"},"modified":"2024-12-25T18:08:16","modified_gmt":"2024-12-25T12:38:16","slug":"causes-of-increase-in-public-expenditure","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/causes-of-increase-in-public-expenditure\/","title":{"rendered":"Causes of Increase in 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-69efd84ac012f\" 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-69efd84ac012f\"  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\/causes-of-increase-in-public-expenditure\/#Causes_of_Increase_in_Public_Expenditure\" >Causes of Increase in 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\/causes-of-increase-in-public-expenditure\/#What_is_Public_Expenditure\" >What is Public Expenditure?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/causes-of-increase-in-public-expenditure\/#Causes_of_Increase_in_Public_Expenditure-2\" >Causes of Increase in 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-4\" href=\"https:\/\/scholarsclasses.com\/blog\/causes-of-increase-in-public-expenditure\/#1_Increase_in_the_Activities_of_the_Government\" >1) Increase in the Activities of the Government<\/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\/causes-of-increase-in-public-expenditure\/#2_Rapid_Increase_in_Population\" >2) Rapid Increase in Population<\/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\/causes-of-increase-in-public-expenditure\/#3_Growing_Urbanization\" >3) Growing Urbanization<\/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\/causes-of-increase-in-public-expenditure\/#4_Increasing_Defence_Expenditure\" >4) Increasing Defence 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\/causes-of-increase-in-public-expenditure\/#5_Spread_of_Democracy\" >5) Spread of Democracy<\/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\/causes-of-increase-in-public-expenditure\/#6_Inflation\" >6) Inflation<\/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\/causes-of-increase-in-public-expenditure\/#7_Industrial_Development\" >7) Industrial Development<\/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\/causes-of-increase-in-public-expenditure\/#8_Disaster_Management\" >8) Disaster Management<\/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=\"Causes_of_Increase_in_Public_Expenditure\"><\/span>Causes of Increase in 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\/Causes-of-Increase-in-Public-Expenditure-1024x576.jpg\" alt=\"Causes of Increase in Public Expenditure\" class=\"wp-image-12935 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Causes-of-Increase-in-Public-Expenditure-1024x576.jpg 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Causes-of-Increase-in-Public-Expenditure-300x169.jpg 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Causes-of-Increase-in-Public-Expenditure-768x432.jpg 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Causes-of-Increase-in-Public-Expenditure-1536x864.jpg 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Causes-of-Increase-in-Public-Expenditure-640x360.jpg 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/12\/Causes-of-Increase-in-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>Causes of Increase in Public Expenditure<\/strong><\/figcaption><\/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<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Causes_of_Increase_in_Public_Expenditure-2\"><\/span>Causes of Increase in Public Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Increase_in_the_Activities_of_the_Government\"><\/span>1) Increase in the Activities of the Government<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The modern government performs many functions such as the spread of education, public health, public works, public recreation, social welfare schemes, etc. It is observed that new functions are continuously being undertaken and old functions are being performed more efficiently on a large scale by the government. This leads to an increase in public expenditure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Rapid_Increase_in_Population\"><\/span>2) Rapid Increase in Population<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The population of developing countries like India is increasing fast. In the 2011 Census, it was 121.02 crores. As a result, the government has to incur greater expenditure to fulfil the needs of the increasing population.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Growing_Urbanization\"><\/span><strong>3) Growing Urbanization<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The spread of urbanization is a global phenomenon of the day. This leads to an increase in the government expenditure on water supply, roads, energy, schools and colleges, public transport, sanitation, etc.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Increasing_Defence_Expenditure\"><\/span>4) Increasing Defence Expenditure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In modern times, defence expenditure of the government is increasing even in peacetime due to unstable and hostile international relationships.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Spread_of_Democracy\"><\/span>5) Spread of Democracy<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The majority of the countries in the world are democratic in nature. A democratic form of government is expensive due to regular elections and other such activities. This results in an increase in the total expenditure of the government.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Inflation\"><\/span>6) Inflation<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Just like a private individual, the government has to buy goods and services from the market for the spread of economic and social development. Normally, prices show a rising trend. Due to this, the government has to incur increasing costs.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_Industrial_Development\"><\/span>7) Industrial Development<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Industrial development leads to an increase in production, employment, and overall growth in the economy. Hence, the government makes huge efforts for implementing various schemes and programmes for industrial development. This results in an increase in government expenditure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_Disaster_Management\"><\/span><strong>8) Disaster Management<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Many natural and man-made calamities like earthquakes, floods, cyclones, social unrest, etc. are occurring more frequently. The government has to spend a huge amount on disaster management which increases total expenditure.<\/p>\n\n\n\n<p>Modern governments are working for the \u2018welfare state\u2019. Hence, there is a continuous increase in public expenditure.<\/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":12935,"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":[4194],"class_list":["post-12927","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-educational-blogs","category-misc","tag-causes-of-increase-in-public-expenditure"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12927","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=12927"}],"version-history":[{"count":1,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12927\/revisions"}],"predecessor-version":[{"id":32831,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/12927\/revisions\/32831"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/12935"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=12927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=12927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=12927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}