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
