Introduction-to-Public-Expenditures.pptx

related to public Expenditure

1. Introduction to Public Expenditure Public expenditure refers to the expenses incurred by governments and public authorities to fulfill their duties and provide services to the public. It is a crucial component of fiscal policy, shaping economic growth and social welfare. Sa by Shivani Taya

2. Causes of Increase in Public Expenditure 1 Population Growth As the population increases, the demand for public services and infrastructure also rises, leading to higher expenditures. 2 Economic Development Investments in healthcare, education, and infrastructure to support economic growth can drive up public spending. 3 Inflation Rising prices lead to increased costs for government programs and services, causing public expenditure to rise. 4 Social Welfare Programs Increased government commitments to social safety nets and public assistance programs contribute to higher public spending.

3. Revenue Expenditure vs. Capital Expenditure Revenue Expenditure Recurring expenses for day-to-day operations, such as salaries, interest payments, and maintenance costs. Capital Expenditure Investments in long-term assets like infrastructure, buildings, and equipment to enhance productivity and service delivery. Balancing Act Governments must strike a balance between revenue and capital expenditure to ensure efficient and sustainable public spending.

4. Development Expenditure vs. Non-development Expenditure Development Expenditure Spending on projects and initiatives aimed at economic and social development, such as infrastructure, education, and healthcare. Non-development Expenditure Spending on administration, defense, interest payments, and other non-productive activities. Optimal Balance Governments must strive to balance development and non-development expenditure to foster sustainable growth and development.

5. Factors Influencing Public Expenditure Economic Factors Economic growth, inflation, and the level of national income can impact public spending requirements. Demographic Factors Population size, age distribution, and urbanization trends can shape the demand for public services. Political Factors Government policies, political ideology, and electoral promises can influence the allocation of public resources. Social Factors Public expectations, social welfare needs, and societal changes can drive changes in public expenditure.

6. Trends in Public Expenditure 1 Increasing Expenditure Over time, public expenditure has generally increased due to factors like population growth, economic development, and expanding social welfare programs. 2 Shifting Priorities The composition of public expenditure has evolved, with a greater focus on development spending and social welfare programs. 3 Fiscal Constraints Governments must balance increasing expenditure demands with the need for fiscal discipline and sustainable public finances.

7. Challenges in Managing Public Expenditure Budget Deficits Ensuring that public expenditure does not outpace revenue can be a significant challenge. Bureaucratic Inefficiencies Streamlining government processes and reducing red tape can improve the efficiency of public spending. Corruption and Misuse Robust oversight and accountability measures are crucial to prevent the misuse of public funds. Political Influence Maintaining objectivity and minimizing political interference in public expenditure decisions is crucial.

8. Strategies for Effective Public Expenditure Management Budgetary Planning Develop a comprehensive and transparent budgeting process to align expenditure with national priorities. Performance Monitoring Implement robust monitoring and evaluation systems to ensure the efficient use of public funds. Fiscal Discipline Maintain a balance between revenue and expenditure to ensure fiscal sustainability and stability. Transparency and Accountability Foster a culture of transparency and accountability to build public trust and prevent misuse of funds.