Principles of Development Expenditure

Principles of Development Expenditure

Principles for Development Expenditure include principles of public benefit, principles of economy, principles of approval, principles of productivity, principles of surplus.

1.    Public Benefit

Development expenditure should be made on those projects which will provide the maximum utility. Overall welfare should be key consideration for development expenditures. Public expenditure should not be used for political gains & mileage.

2.    Principal of Economy

It is public money and therefore a great care should be exercise, while incurring the public expenditure. Economy means effective utilization of available resources and controlling wastage. Principle of economy demands that unnecessary expenditure should be avoided.

3.    Approved Expenditure

Development expenditure involves heavy amounts, and therefore there must be a formal procedure for approval of such expenditure.  Approval procedure will ensure the right selection of projects. Formal approval process comprises of depth analyses of projects, justification of project, and objective of project, beneficiary of project, cost and benefit analyses etc.

4.    Productivity is ensured

Development Expenditure must ensure productivity; otherwise this expenditure will be a burden on the national purse. Productivity is a key criteria for development projects. In modern world government has lot non development expenditure; therefore a project without productivity will be an addition to the non development expenditure.

5.    Surplus Approach

Development expenditure should be completed within given budget. It means development project should not require extra fund, because such demand will lead to budget deficit, which is not a favorable situation for national economy.