Abstract

PUBLIC EXPENDITURE MANAGEMENT IN INDIA: STRUCTURE AND ASSESSMENT

Nidhi Tewathia

Volume: 4 Issue: 4 2014

Abstract:

The national budget is the main instrument through which governments collect resources from the economy and allocate them. Since earlier times, Public finance concentrated on the study of public revenue and issues relating to taxation rather than the expenditure. Over the years, it has been found that major area of concern is to channelize public expenditure into those areas of the economy where its effects will be optional in terms of growth, consumption and distribution. And more recently, the serious concern has been voiced regarding the effective utilisation of government funds and the paramount need to avoid wasteful expenditure. Insufficient revenues to meet all budget needs has resulted in continuous forced expenditure sequestration, lack of efficient controls over budgetary commitments, forcing fiscal adjustment from the federal to lower levels of government, and creating a large gray sector within government, which largely goes unrecorded and escapes regular budgetary controls. The overall strategy from a PEM perspective is twofold: a) to eliminate this gray noncash government sector by covering these transactions in the budget process; b) to improve the budget process by introducing more transparent, internationally accepted standards, both in budget preparation and execution, for all government operations.

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