Government expenditure
- 1. GOVERNMENT EXPENDITURE AND ITS RELATION WITH OTHER ECONOMIC VARIABLES
- 2. GOVT. EXPENDITURE Agriculture (irrigation, flood control,subsidies) Rural development Energy Population Growth and Urbanisation Maintaining Economic Stability (inflation and employment) Capital formation Mounting Debt Service Charges (return of loans and borrowings) Anti-Poverty Schemes Improving overall GDP
- 3. Types of govt. expenditure Public expenditure REVENUE EXPENDITURE DEFENCE ADMINISTRATION SUBSIDIES SALARIES INTEREST PAYMENTS CAPITAL EXPENDITURE R&D TRANSPORT HEALTH EDUCATION INDUSTRIAL UNITS IRRIGATION PROJECTS INVESTMENT
- 4. Should India go for expansionary fiscal policy? Two ways to revive economy- A) lowering interest rates B) expansionary fiscal policy FACTS: 2013-2014 - combined fiscal deficit was 6.78 percent of the GDP Total liabilities of the Central government- 46.3 percent of GDP Falling revenues- 2013-2014: tax revenue:9.06% of GDP non-Tax revenue: 1.70 % of GDP The important fact is though our liabilities are decreasing our revenue sources are also decreasing. Our interest payments have however increased to 3.79% in 2013-14. The big question?
- 5. "Many big emerging nations including China, Russia and Brazil just tried a full- throttle experiment in stimulus spending, and it failed. The average growth rate for emerging economies excluding China has fallen to 2.5% today, from more than 7% at the height of the spending campaign in 2010. That is the lowest growth rate in four decades, outside of a global recession.“ Ruchir Sharma of Morgan Stanley At the end of the day what matters is not the quantity of spending but the quality of spending. Increasing public spending by the government may not be the best way to go about reviving economic growth.
- 6. UNEMPLOYMENT AND POVERTY INDICATORS 1973-74 1983-84 1993-94 2004-05 2011-12 Population growth (in crores) 54.8 68.3 84.6 102.8 121+ PER CAPITA INCOME (2004-05) (RS) 10688 12894 16736 26629 41225 POVERTY RATIO (%) 54.9 44.5 36 27.5 21.9 Unemployment rate (%) 4.86 9.60 6.91 5.54 8.93 PUBLIC EXPENDITURE (IN BILLIONS) 118.38 332.48 880.81 1931.14 10304.61 INCREASE IN PUBLIC EXPENDITURE (%) - 280.86 264.92 219.25 533.60 Labor Force Statistics from the Current Population Survey
- 7. VARIOUS SCHEMES- Indira Awas Yojana, Anantodaya, minimum needs programme, Integrated urban poverty eradication programme, MGNREGA, JRY, etc. Definitely in terms of percentage poverty has come down, but in absolute terms the question is still unanswered? The fault lies not in policies as India has so many poverty schemes and a very large amount Govt. spends on these. Fault lies in the implementation of these schemes. Middle men do not let the schemes to reach the grass-root level.
- 8. EDUCATION HEALTH WATER SUPPLY AND SANITATION FAMILY WELFARE etc. SOCIAL SERVICESAND PUBLIC EXPENDITURE INDICATORS 1990-91 1994-95 2000-01 2004-05 2010-11 GDP(IN BILLIONS) 5862.12 10455.90 21774.13 32422.09 77953.13 %OF EXP ON EDUCATION/GDP 4.01 3.56 4.33 3.69 GROWTH RATE OF PUBLIC EXP ON HEALTH 1.94 17.59 10.76