PUBLIC EXPENDITURE

IN INDIA
 INTRODUCTION

•Public expenditure refers to government spending. 

•

•Government acquisition of goods and services intended to

create future benefits, such as infrastructure investment or
research spending.
•Role of public expenditure has varied across different phases
of
economic development in India.
•The significance of public expenditure can be judged from its
effects on the economy of the country.
•

•Its ability to achieve important economic objectives depends

partly on:
•

(a) The volume of government expenditure in relation to

national income; and partly on;
(b) The proportion of public expenditure on development
activities and welfare activities or transfer benefits.
•
•Public expenditure in India has grown fairly rapidly during the
Plan Periods.
•India’s public expenditure is classified as development
expenditure comprising central plan expenditure and central
assistance and non-development expenditures.
These categories can each be divided into capital and revenue
•

expenditures .
 •Before 1987-88 the revenue expenditure of the central
government was broadly classified into:
•

•civil expenditure
•defense expenditure
•grants in aid to states and union territories.

•From 1987- 88 The Central Govt. adopted a new classification of

Public expenditure.
•

•Planned expenditure
•Non- planned expenditure

Planned expenditure : composed of:

(a)Central plans such as on agriculture, rural development,

irrigation and flood control, energy, industry and minerals,
transport, communications, science and technology and
(b)
environment, social services.
(c)Central assistance for plans of the states and union
territories.
•The public expenditure in India is the growing revenue
expenditure of the government from over Rs. 350 crores in 1950-51
to over Rs. 6,58,120 crores in 2008-09.
•

•
•Increased defence commitments,
•
•Expansion of administration,
•
•The government’s international commitments,
•Increase in government’s participation in nation building
activities like education and public health, rise in
prices, etc. cause the rise in revenue expenditure.
•
Non - planned expenditure has been rising very fast in recent
years
•Interest payments, defence expenditures, subsidies and
general services- these together form over 90% of non-
planned expenditure.
 CONCLUSION :

•The expenditure of the Central government since 1950-51 has

been influenced largely by two considerations.
•

1.The necessity to speed up the economic development of the

Country.
2. Keep the country prepared to face threats to its
security from foreign aggression.