Public expenditure, Managerial Economics

Assignment Help:

PUBLIC EXPENDITURE

The accounts of the central government are centered on two funds, the Consolidated Fund, which handles the revenues form taxation and other miscellaneous receipts such as broadcasting license fees, interest and dividends, and the National Loans Fund which conducts the bulk of the governments domestic borrowing and lending.

Each government ministry works out how much money it wants to spend in the coming Financial Year which, in Kenya starts on 1st July in each year and ends on 30th June on the following year.  This is known as preparing estimates.  There are two types of estimates, -estimates of Capital Expenditure and estimates of Recurrent Expenditure.

Capital Expenditure refers to the money spent on government projects such as the construction of roads, bridges, health facilities, educational institutions and other infrastructure facilities.  Recurrent expenditure refers to money spent by the government on a regular basis throughout the Financial Year e.g. the salaries of all civil servants, or the cost of lighting a government building.

Government departments also have to prepare estimates for the next financial year for presentation to parliament.  Any department which earns revenue for sales of goods or services to the public shows this as an appropriations-in aid, which is deducted from its estimated gross expenditure to show net expenditure, that is, the actual amount required of the Exchequer.

The estimates also include Grants-in aid i.e. grants made by the central government to local authorities to supplement their revenue from their levying of rates.


Related Discussions:- Public expenditure

Organization for economic development (oecd), Organization for Economic...

Organization for Economic Development (OECD) An international organization found in Paris France in 1961, to act as a worldwide forum to stimulate world trade and

Theories of economic growth-neoclassical theory, Neoclassical Theory Th...

Neoclassical Theory The neoclassical theory of economic growth began its career in the fifties and since the mid fifties a sizeable literature has developed. The theory largely

What is demand theory, What is Demand theory: Demand theory relates to ...

What is Demand theory: Demand theory relates to the study of consumer behaviour. It addresses questions like what incites a consumer to buy a particular product, why do consume

How pollution can make the market equilibrium inefficient, In regards to ai...

In regards to air pollution, use a diagram to show and explain how the existence of pollution can make the market equilibrium inefficient.

Demerits of direct taxes, Demerits of direct taxes a. Heavy direct tax...

Demerits of direct taxes a. Heavy direct taxation, especially when closely linked to current earnings, can act as a serious check to productivity by encouraging absenteeism

Show the isoquant touching axis, Q. Show the Isoquant touching axis? I...

Q. Show the Isoquant touching axis? Isoquants do not intersect: By definition isoquants such as indifference curves, can never cut each other. If they cut each other it will

Total cost (tc), Total Cost (TC) This is the sum of fixed costs and va...

Total Cost (TC) This is the sum of fixed costs and variable costs i.e. TC = FC + VC.

Gross domestic product, Gross Domestic Product A measure of national ec...

Gross Domestic Product A measure of national economic activity, GDP is measured from two approaches. GDP can be viewed as the total value of all goods and services produced in

Real rigidities in the labour market, Real Rigidities in the Labour Market ...

Real Rigidities in the Labour Market   New Keynesian  theories of the labour market help in explaining  the existence of involuntary unemployment. The theories also attempt to

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd