Is public expenditure productive?

  February 16, 2020
      No Comments

Is public expenditure productive?

We classify productive government spending as the sum of expenditure on education, health, defence, housing, economic affairs and general public services expenditure, while non-productive expenditure consists of expenditure on public order and safety, recreation and social protection.

Who proposed the theory of public expenditure?

In the 20th century, John Maynard Keynes argued the role of public expenditure in determining levels of income and distribution in the economy.

What is meant by productive expenditure?

2 yielding favourable or effective results. 3 (Economics) a producing or capable of producing goods and services that have monetary or exchange value.

What do you mean by productive and unproductive expenditure?

Expenditures in the nature of consumption such as defence, interest payments, expenditure on law and order, public administration, do not create any productive asset which can bring income or returns to the government. Such expenses are classified as unproductive expenditures.

Which expenditure is productive in nature?

The expenditure which does not yield any direct productive impact on the country is called non-developmental expenditure. It is productive in nature. It is unproductive in nature. E.g.: expenditure on health, education, industrial development, social welfare, research, and development, etc.

What is non productive expenditure?

For a single program, unproductive expenditure may be defined as the difference between the actual public spending on the program and the reduced spending that would yield the same social benefit with maximum cost-effectiveness.

What is the theory of public expenditure?

THE THEORY OF PUBLIC EXPENDITURES. BY PROFESSOR HENRY C. ADAMS, PH. D., UNIVERSITY OV MICHIGAN. The aim of a discussion of public expenditures is to discover the meaning of expenditures for the life of a people and in this manner to arrive at the principles which control appropriations.

What are the causes for increasing public expenditure?

Causes of Increase in Public Expenditure

  • Increase in backward area and population.
  • Growth of state functions.
  • Higher price-level and rising cost of public services.
  • Increase in national wealth.
  • Increased ability to tax.
  • War and prevention of war (defence)
  • Provision of public utility services.
  • Expansion in social services.

What is an example of productive expenditure?

Meanwhile, investment in physical and human capital, including education, healthcare and sports, road infrastructure and transportation (productive expenditure) is associated with both short- and long-term economic growth.

What is public revenue and public expenditure?

‘Public revenue’ (or Government revenue) is concerned with the Income of the Government through various sources. The Government collects/earns money through various forms of tax and non-tax revenue, and use this money to meet its administrative and other expenditures.

What are the types of public expenditure?

Classification of Public Expenditure:

  • Revenue Expenditure and Capital Expenditure:
  • Developmental and Non-Development Expenditure:
  • Wagner’s Law of Increasing State Activity:
  • Wiseman-Peacock Hypothesis:
  • Population Growth and Urbanisation:
  • Activities of a Welfare State:
  • Maintaining Economic Stability: