public expenditure final
TRANSCRIPT
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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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