Read the following case study paragraphs carefully and answer the question based on the same. Public expenditure accelerates the pace of GDP growth. Higher rate of GDP growth is achieved through (A) investment expenditure in public sector enterprises, (B) capital grants by the government for the purchase of capital equipment, (C) subsidies for the purchase of inputs, and (D) purchase of farm output at the minimum support price. Public expenditure promotes equality in the distribution of income and wealth. This is achieved by offering old-age pensions, as well as by providing free food,... Show more Read the following case study paragraphs carefully and answer the question based on the same. Public expenditure accelerates the pace of GDP growth. Higher rate of GDP growth is achieved through (A) investment expenditure in public sector enterprises, (B) capital grants by the government for the purchase of capital equipment, (C) subsidies for the purchase of inputs, and (D) purchase of farm output at the minimum support price. Public expenditure promotes equality in the distribution of income and wealth. This is achieved by offering old-age pensions, as well as by providing free food, education, and health services to the Below Poverty Line Population. Public expenditure plays a significant role in restoring economic stability. Particularly, when the economy is battling economic recession. The government expenditure (consumption expenditure as well as investment expenditure) raises the level of AD. Only when AD is raised that the vicious circle of economic recession is broken. Public expenditure generates investment-friendly environment in th e economy. The g overnm ent spend s m o ney on infrastructural development. It constructs roads, dams, bridges. It introduces faster and convenient means of transportation. Such facilities promote inducement to investment. Briefly, public expenditure is indispensable in any welfare state like India. It not only promotes GDP growth, but also promotes social welfare. Show less
Read the following case study paragraphs carefully and answer the question based on the same.
Public expenditure accelerates the pace of GDP growth. Higher rate of GDP growth is achieved through (A) investment expenditure in public sector enterprises, (B) capital grants by the government for the purchase of capital equipment, (C) subsidies for the purchase of inputs, and (D) purchase of farm output at the minimum support price. Public expenditure promotes equality in the distribution of income and wealth. This is achieved by offering old-age pensions, as well as by providing free food, education, and health services to the Below Poverty Line Population. Public expenditure plays a significant role in restoring economic stability. Particularly, when the economy is battling economic recession. The government expenditure (consumption expenditure as well as investment expenditure) raises the level of AD. Only when AD is raised that the vicious circle of economic recession is broken. Public expenditure generates investment-friendly environment in th e economy. The g overnm ent spend s m o ney on infrastructural development. It constructs roads, dams, bridges. It introduces faster and convenient means of transportation. Such facilities promote inducement to investment. Briefly, public expenditure is indispensable in any welfare state like India. It not only promotes GDP growth, but also promotes social welfare.
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