Question

Explain the meaning and nature of public expenditure.

Answer 1

The following points can help to explain the purpose and nature of public expenditure:

1. Public expenditure is that expenditure which is incurred by the public authority [Central, State and Local Bodies] for the protection of their citizens, for satisfying their collective needs and for promoting their economic and social welfare.
2. Till the 20^th century, the majority of the governments had adopted a policy of laissez faire. But modern governments perform obligatory as well as optional functions, leading to growth in public expenditure.