.Causes of tremendous increase in public expenditure?
Public Expenditure refers to Government Expenditure. It is incurred by Central and State Governments. The Public Expenditure is incurred on various activities for the welfare of the people and also for the economic development, especially in developing countries. In other words The Expenditure incurred by Public authorities like Central, State and local governments to satisfy the collective social wants of the people is known as public expenditure. Ans: 1. Wagner’s law of public welfare: According to wagner, the main casue if increase in public expenditure is the multiplication of the activities of the govt.Since independence , noth the development and non-development activities of the govet have considerably increased. Govt exp has increased on account of the expansion of public sector. In order to promote welfare of the people , govt has to spend large amounts on their merit wants such as construction of roads , parks etc.Public exp has also increased coz of external factors.
2.Defence exp: There has been enormous increase in denfence exp in india during planning period. Acc to eco survey the defence exp of central govt has increased sifnificantly . The defence exp has increase tremendously due to modernaisation of defence equiplemnt used by army , navy and airforce. India cannot postpone modernisation in defence specially when its neighbouring countries are buying the latest defence equipment from developed countries of the world. 3. Increase in prices: Rising prices also account for the increase of public expenditure in India. Prices have been rising in india since 1956.Cozof increased prices, govt has to spend more in order to get the same amount of goods and services as before. Govt employees have to be paid more salaries, more dearness allowance and more pension.Exp of development projects also increases. 4.International association: After world war II many international organisation were set up ....
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