Advantages of Public Expenditure

Advantages of Public Expenditure

1.    Employment Opportunities

Public expenditure will create employment opportunities in the economy. Government will directly employ people for different social sector program, for example doctor for health sector and teacher for education sector. Government expenditure will also raise the aggregate demand for goods, and this increase in aggregate demand will create job opportunities.

2.    Filling the income Distribution Gap

Public expenditure is also a source of filling the income distribution gap between poor segment of society and rich people. Public expenditure on social welfare program will reduce the income difference between rich & poor people.

3.    Social Welfare

Public expenditure will improve the social condition of the people; especially poor people will be benefited from the public expenditure. Public expenditure will also increase the saving of people and they can improve standard of life by spending those savings.

4.    Economic Stability

Public expenditure is regarded as government intervention in the free market, therefore this intervention play important role to maintain stability in the country. For example in case of depression public expenditure can change situation i.e. recovery of economic activities.

5.    Economic Growth Targets

Public expenditure is also used as tool to achieve the economic growth target. Government is interested to achieve high growth rate which will bring prosperity in the country.