Public Expenditure Final

8/9/2019 Public Expenditure Final

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Public Expenditure

Group Introduction

Syed Hassan Ali shah

Muhammad Ijaz Muhammad Bilal

Syed Ilyas Sami


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Public Expenditure

Public expenditure is an expression of people's

will and needs managed through political

parties and institutions

Government collect revenue from on one side

in the form of taxes and spend it on other side

in the form of Public Expenditure for thewelfare of public

Expenditure should be made on the basis of

public wills and need for their well being


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Categories of Public Expenditure

1. Current expenditure

2. Capital expenditure

3. Transfer payment

4. Debt interest


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Current Expenditure Spending on day to day running of public

services like hospitals, schools, sanitation, police

and military departments etc Current expenditure are also involve in

environment protection like salaries paid toworkers, purchase of equipments and rent and

fuel consumption From above discussion it may be concluded that

current expenditure are day to day spending onprovision of different facilities provided bypublicsector to nationals


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Capital Expenditure

All those expenditure which are made for theprovision of capital like construction of new

hospitals, roads and other infrastructure works Capital expenditure contributes up to a large

extent towards the development of the countrybecause capital provide strong infrastructure and

infrastructure are the back bone of a countrieseconomy

Govt. purchase capital from national or international markets and use it for the welfare of

public


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Transfer Payments

Transfer payment is the amount paid bygovt. to individuals of country in return ofwhich they are not supposed to payanything to govt.

Also called negative taxes

Example: Pensions, subsides, rewards andscholarship paid by government to theindividuals of the country


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Debt interest

This is payment of interest to the holders

of the government debt, e.g. the payment ofinterest to the holders of national saving

certificates, government bonds and lenders

Budget deficit

Budget surplus


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Function of Public ExpenditureNormally the function areas of public expenditure depend

upon the political philosophy of the country

1. The provision of public and merit goodsand services

A large part of public expenditure is used to providepublic and merit goods. These goods maybe in the form

of schools, hospitals, roads and other welfare projects Provision of public and merit goods and services are

essential for running of economy and for continuoussurvival of public

Public goods

Merit goods


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2. Improving the Efficiency of Allocationof the Resources

Govt. Spend money in such a way to insure the

efficiency of resources being spend in order toimprove the performance of all the sectors of

economy

If the expenditure is allocated inefficiently than it

will be wasted and will not generate required

outcomes

Efficiency is more important than allocation of

expenditure


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Role of Public Expenditure It contributes to current effective demand

It increases the public endowment of goods for

everybody It gives rise to positive externalities to economy

and society, through its capital component

Public expenditure also contributes toward the

development of the economy Public expenditure provide social security

Public expenditure creates business cycles


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Muhammad Ijaz

Influencing on public spending Infrastructure expenditure

Military expenditure


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Influencing on the level of

Government Spending1. Cyclical Influence

Changes in the level of economic activity

(recession,economic boom)2. Demographic Influence

Increase in age of population(health and pensionsexpenditure increase)

3.

Social changes Decline in family setup(Gov spending on social

security and health increase), one parent family

Crime level

Richer society demand more


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4. Demand for Private Goods

When a demand for a range of privategoods increases, demand for complementarygovernment financed goods and services willrise.

Example: car ownership affects roadbuilding

5. Changes in Technology

Improvements in technology have mademore expensive operations such as multipleorgan transplants possible, thereby increasinghealth care expenditure. Spending on educationhas risen with the purchase of computers by

schools.


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9. Increase in Real Wages

Health care, police and education, forexample, are labor intensive. So increase inwages, if not offset by productivity

increases, will raise governmentexpenditure.

10. The Risk of theConflicts

Some of the resources which had been

use in the defense industry were transferredinto the production of the civilian goods andservices which add more directly to welfare


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Macro-functions

Public Expenditure on Infrastructure High share of GDP

Spending on infrastructure is necessar y fordevelopment.

Communication channels(transport system acts as abackbone of economy)

New markets(opportunities)

Influencing factors:

Per capita income

New technologies

Population

Urbanization

Rural areas


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Infrastructure leads to:

Its spending leads to urbanization rate, laborforce participation.

Positive influenced sectoral imbalancebetween rural and urban areas.

Education(people approaches to nearest bigcities)

Health(provision of gas, electricity, hospital)

Effectiveness(no wastage of resources)

Industrial revolution


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Military System

Personal, operations, maintenances. Procurement ofweapons, military construction.

High share of GDP

Influencing factors: Technology

Competition

Its a need of the country, but should be manageeffectively not as a burden.

Advantages:

Earn foreign exchange(selling)


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EDUCATION SYSTEM

&

HEATHC

AR

E

MUHAMMAD BILAL


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EDUCATION SYSTEM

Education is an indicator of development and

growth of a country.

Also the education moves an economy

towards the technology advancements and

new scientific researches.

Literacy rate in developing countries is 99%

while in less develop countries it is just 45-

50%.


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Federal Ministry of Education

Develops the national education policy.

Provides guidance to the provincial education

departments and textbook boards.

Sets teachers pay scales.

Define requirements for teacher qualification toimprove the quality of education.

Develop a curriculum at the national level.


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Provincial Department of Education

Responsible for teacher training

Ensure access to schools for both girls and

boys

Influence the federal government in

developing a good quality curriculum

Set-up a criteria to determine the qualification

of teachers


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District Education Department Responsible for allocating resources to different

branches of education at the local level

Prepare the annual budget for primary and secondary

education Manage teaching and non-teaching staff

Provide funds for establishing new schools

Regular school inspections to ensure quality

Teacher evaluations Planning, monitoring and evaluation of the district

education system e.g.

Financial records etc


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Table Projected Budgetary Expenditure onEducation

Year Expenditure (Rs. Million) % of GDP

2002-03 (actual) 78,613 1.96

2003-04(Actual) 88,842 2.01

2004-05Actual) 102,375 2.01

2005-06(Budgeted) 116,036 2.15

2006-07 ( projected) 135,049 2.2


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Health care

Provision of safe drinking water, food and concepts

of primary health care are also started in rural areas.

Traditional government-provided health care

services are changing to Advanced and expensivemethods.

Awareness about health related matters (Public

Awareness) like Advertisements.

Government policy that continued to fund health

sector for new projects launching e.g. polio etc.

Doctors, Paramedics, Hospitals with beds, new

equipments and machines.


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Growth of education, especially female

education.

Subsidized medical and nursing education

supplying.

Conducting, administrating reports, surveys and

different campaigns.

Public health authorities are also concerned

about elevation of epidemics like cholera,

measles and other virus infectious diseases.


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PUBLIC EXPENDITURES

ECONOMIC AFFAIRSPOOR

FIRMS,EXPORTS & PRODUCTION

SPECIAL POLICY EXPENDITURESDRUGS

FOREIGN AID

By:

SYED ILYASSAMI


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ECONOMIC AFFAIRS

I. POOR

II.FIRMS,EXPORTS &

PRODUCTION


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PUBLIC EXPENDITURE ON POOR

Infrastructure expenditure that is---energy andwater supply, transport and telecommunications,

sanitation and waste facilities, flood protectionand drainage, and other general-purpose urbanfacilities. Irrigation is also touched on.

Social infrastructure which would includefacilities such as schools, hospitals and culturalcenters. Most infrastructure systems consist ofboth trunk/bulk-supply installations and local

distribution/collection networks


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Key Areas Government mainly look on these areas: Rural Poverty, Women

poverty and Ethnic Minorities and poverty.

Institutional Reforms: Use of infrastructure assets and on easinginvestment continue rapid spread in poverty elevation.

Effective competition in service(employment) provision is the key

factor in securing wider Expenditures.

Local government are managing municipal development and finances.

Development Goals in Education and Health, and attention are given asmuch to social as to economic initiatives .

Economic analyses focusing: costs and prices, production and

employment volumes, education participation, health improvements,etc.

The very large subsidies.

Subsidies effectively targeted to the poor.

Old age benefit organizations are made are also found in mostcountries.


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FIRMS, EXPORT ANDPRODUCTION


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Privatization.

Trade, Export Promotion and Industry Program.

Technological revolutions and Research.

Exploring possibilities of sub regional cooperation in othersectors and areas.

Giving incentives to Banking sector for loaning inindustrialization and agriculture reforms.

Expenditures on several programs with different names indifferent countries:

EnergySectorRestructuring Program

Justice Program

Agriculture Sector Program Loan Decentralization Support Program

The Rural Finance Sector Development Program

Financial Markets

Governance Program

Human Resources Development programs


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SPECIAL POLICY EXPENDITURES

onDRUGS

&

FOREIGN AID


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Public Expenditure on Fight against Drugs

Public expenditure in the field of drugs, what is usually called

the drugs budget is composed of two types ofexpenditure:

Direct ExpenditurePublic expenditure directly labeled as drug-related are theresources spent by public authorities and generic services

(police, customs, public health institutions etc.) to deal with

questions arising from drugs.

Indirect ExpenditureCalculating the level of indirect expenditure is based on a

complex estimate of the proportion of activity each public

auth

ority carries out in t

hefield of drugs control

.


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Direct Expendituresi.Health care

Public spending in matters of health care includes allpublic spending devoted to the care of the

consequences of drug consumption and relateddiseases, this being the cost of free care in specializedcenters operated by the governments.

ii. Law enforcement

Police forces.

Customs drug-related offences.

Prosecution of drug offences (judiciary system).

Imprisonment related to drugs.


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Foreign Aid

Areas of Foreign Aid Governance

Agriculture and

Rural Development

Health

Education

Infrastructure

Environment

Gender Governance

Developed economies are contributing a lot in terms of foreign

aid. The factors including openness to foreign trade, high savings

rates, stable macroeconomic policies, high literacy rates,

favorable demographic characteristics and High GNP figures are

the things which enable the country to go for Aid e.g. U.S andJapan.


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KeySectors of the Aid Program Communication and Information NGOs and volunteer Programs

Non Government Organizations (NGOs)

Volunteer Programs

Emergency and Humanitarian programs Emergency Assistance Other Humanitarian Aid

Global Programs Multilateral Organizations

Multilateral Development Banks

United Nations Organizations International Health Programs

International Environment Programs

Commonwealth Organizations

Cross Regional Program

Direct Assistance Program Scholarship Scheme


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IfYou Have Any Question You

May Ask ? ? ?


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Documents

Public Expenditure Final