Main menu


How public expenditure helps on developing economy of country?

Role of public expenditure in a developing economy

public expenditure

1. Social and economic overheads

Economic development is handicapped in developing countries due to deficiency of capital and infrastructure. economic overheads like roads and Railways, irrigation in power projects social overheads like Hospitals, schools, and colleges and Technical institutions are essential. Capital for such Overheads cannot sufficiently come out of private sources. Public expenditure is necessary to build economic and social overheads.

2. Balance regional growth

It is considered desirable to bring about balanced regional growth. Special attention has to be paid to the development of backward areas and underdeveloped regions. This requires huge amounts For which Airlines has to be placed on public expenditure

3. Development of agriculture and industry

Agriculture development provides the base of industrial development and has to be given top priority. The government also has to increase heavy expenditure in the agricultural sector on irrigation, power, seed, farms, fertilizers factories, warehouses, etc., and in the industrial sector by the sitting of public enterprises like the Steel plants, have Electricals, heavy engineering, machines making factories, etc.

4. Exploitation and development of mineral resources

Minerals provide a base for further economic development. The government has to undertake schemes of exploration and development of essential materials, e.g., gas, petroleum, coal, etc. Public expenditure has to play a portal role in the exploration and development of mineral resources.

5. Education

Education not only contributed to the mental development of man but also Rises productivity. Moreover, Mass education is a necessary condition for the success of democracy. the state has made attempts to create various types of educational facilities. The government has also set of specialized institutes of Medical and Technical Education which involves heavy expenditure.

6. Defence expenditure

Defense is the main factor that has increases public expenditure in Modern Times. now armaments race among the nations is increasing day by day. This expenditure has contributed to an increase in expenditure.

7. Control of inflation

With the rising prices, the government has to keep on increasing public expenditure to carry out its functions and maintain the supply of public goods intact. During inflation, the government has to pay additional dearness allowance to its employees which obviously cal for an extra burden on public expenditure.



Contents in this page