The document discusses public expenditure, including its importance and objectives such as building infrastructure, regional development, agriculture, and industry. It also discusses the increasing trend of public expenditure due to factors like income growth, welfare state ideology, effects of war, inflation, urbanization, rural development, population growth, and economic planning. The document outlines some principles or canons of public expenditure such as benefit, economy, sanction, and surplus. It also discusses the effects of public expenditure on consumption, production, efficiency, incentives, allocation, and distribution.

1. Public Expenditure
-To satisfy collective social wants.
We have current expenditure and developmental
expenditure?
-Importance and objects of public expenditure
-Building economic overhead, etc.
-Bringing about balanced regional growth.
-Augmenting the development of agriculture and
industry.
-Bring about rural development

2. Increasing trend of public
expenditure
•
- To protect society from violence and
invasion
•
-to protect every member of society from
the injustice or oppression of every other
member.
•
- to create and maintain certain public
works and certain public institutions which
can never be in the interest of any person
or group of persons.

3. Causes of public expenditure
growth
•
The rising trend of public expenditure in modern times may
attributed to a multitude of causes.
•
-Income elasticity and increase in Per Capita Income according to
Musgrave.
•
-Welfare State Ideology and Wagner’s Law.
•
-Effects of war and need for defence
•
-Resource Mobilization and ability to finance
•
-Inflation
•
-The role of democracy and socialism
•
-The Urbanization effect
•
-The Rural development Effect
•
-The Population Effect
•
-The Planning Effect

4. Canons of Public expenditure
•
The fundamental rules or principles
governing the spending policy of the
government
•
- Canon of benefit
•
-Canon of economy
•
-Canon of sanction, This suggests that no
public spending should be b made without
the approval of proper authority
•
-Canon of surplus

5. Effects of public expenditure
•
-Effect on consumption
•
-Effect on production
•
-Following Dalton, we may specify the three
inter-related effects of public expenditure on
production, as under:
•
-Efficiency effect,
•
-Incentive effect,
•
- Allocative effect
•
-Effect of public expenditure on distribution