Question

Explain any three reasons for the growth of public expenditure.

Answer 1

The main reasons for the growth of public expenditure are as follows:

1. Developmental Work: In addition to their basic tasks of administration and defence, modern states must engage in developmental efforts. In India, for example, the Central and State Governments execute a wide range of developmental functions. The fundamental cause of the increase in public expenditure is the increase in developmental work.
2. Rise in Price Level: As a result of the price increase, government spending has increased everywhere. The reason for this is that the government must also purchase goods and services from the market, even if the prices are higher.
3.  Greater Expenditure on Internal and External Security: Today's government must spend more and more on internal and foreign security, resulting in an increase in public spending.