Public expenditure refers to the expenditure incurred by the government (i.e. central, state, local governments)
for the satisfaction of collective needs of the people.
Following are the main reasons behind consistent growth of public expenditure in India.
(1) Development Projects : In India, we have taken up a large variety of development projects under the five year plans. This has led to increase in public expenditure.
(2) Increase in Population : The growth of population has necessitated the expenditure on providing transport and communication facilities, educational institution, health facilities etc. This has led to a huge growth of public expenditure in recent years.
(3) Increasing Defence Expenditure : Government has to spend more and more on providing internal security to its people
(4) Rise in price level : As a result of rise in the price level, public expenditure has gone up very high. The reason is that the government has to purchase various goods and services from the market at higher prices.