ITEMS OF GOVERNMENT EXPENITURE

ITEMS OF GOVERNMENT EXPENITURE

       We shall now briefly elaborate on the items of expenditure which the government initiates after accumulating the necessary revenue. These expenditures may be in the form of development expenditure or even non-development expenditure.

1.                            DEFENCE AND INTERNAL SECURITY:  Expenditure on defence for a country is usually determined by surrounding circumstances. For countries in the war-zone Government expenditure on defence would be quite high. Internal security or police and other uniform services is a must in every country, for it is in their hands to ensure that peace and law and one order is maintained. Thus expenditure on recruitment of personal, uniforms, equipments etc. is provided by the government.

2.                            CIVIL ADMINISTRATION AND THE COURTS: Civil servants and other Government staff salaries are paid by the government. In other words, we could also say that the people generally pay the salaries of government servants. The courts, on the other particularly the judiciary are also paid a handsome allowance. This is to safeguard the judiciary and maintain its impartiality so that no bribery may take place. However, in certain countries like England the judiciary is paid out of a special fund to avoid scrutiny in parliament.

3.                            EDUCATION AND SOCIAL WELFARE: The Government sets up schools and higher mediums of education with the revenue obtained partly and allocate a certain part of its budget for that purpose as well. Likewise health centers, orphanage homes etc, are set up by the government in the interest of the people in general. Doctors, nurses and other staff are thus paid by the government as well.

4.                            COMMUNICATION/ TRANSPORTATION AND IRRIGATION PROJECTS:  Roads, railways, ships and aero planes are provided by the government for purposes of communication on and transportation. Likewise irrigation projects such as dams, hydroelectric generators etc, are built for the community.

5.                            FOREIGN RELATIONS AND FOREIGN LOANS:  For diplomatic purposes a government would have to build or at least provide money for the payment of rent on an embassy in the host country. Similarly the government has to pay back its debt i.e. loans obtained from foreign bodies.

                We shall now proceed on the next phase i.e. to explain the canons of taxation or in other words, the characteristics of good taxation.