A major canon of public expenditure is the canon of maximum social benefit. It implies that public expenditure should be incurred carefully and economically. Economy here means avoidance of extravagance and wastages in public spending. Public expenditure must be productive and efficient.
Who gave the canons of public expenditure?
According to Prof. Findlay Shirras public expenditure should bring with it important social advantages such as increased production, equitable distribution, social justice and maximum social welfare. Canon of Benefit is the fundamental canons of public spending.
Which are in the principle of public expenditure?
1. Principle of Maximum Social Benefit: It is necessary that all public expenditure should satisfy one fundamental test, viz., that of Maximum Social Advantage. That is, the government should discover and maintain an optimum level of public expenditure by balancing social benefits and social costs.
What are the main objectives of public expenditure?
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The objectives of public expenditure are the following:
- Provide social goods:
- Remove unemployment:
- Increase Production:
- Exploitation and Development of Mineral Resources:
- Promote Price Stability:
- Promote Balanced Growth:
- Reduce Inequality of Income:
What are the roles of public expenditure?
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Public spending is considered to be an important tool of fiscal policy, which includes all consumer goods, investment payments and redistribution of the income. The government uses them to speed up economic growth by increasing the demand for productive public goods (Slemrod, 1995).
Table of ContentsWhat are the effects of public expenditure?
Public expenditure acts as a pump-priming,attracting idle resources to their productive utilization. Accordingly,production level tends to raise the resources from unproductive activities to productive ones. This results in increase in production.
What are the fundamental canons of public expenditure?
Which is the main principle of public expenditure?
Principles of Public Expenditure: The main principles or canons of public expenditure are as follows: (i) The Principle of Maximum Social Advantage: The government expenditure should be incurred in such a way that it should give benefit to the community as a whole. The aim of the public expenditure is the provision of maximum social advantage.
Which is the best canon of public spending?
Canon of Benefit is the fundamental canons of public spending. According to this canon public money should be spent so as to promote Maximum Social Advantage (MSA). Every expenditure should be directed to achieve maximum social advantage to the community.
Why do we need flexibility in public expenditure?
Flexibility must be there in public expenditure. It implies that the expenditure may be expended or contracted according to the requirement of the time. At a time of crisis, the expenditure should be cut down because the income of the government is expected to be short at such a time.
