1) What is public expenditure ?

Public expenditure is spending made by the government of a country, on various

activities for the welfare of the people and also for the economic development.

In other words The Expenditure incurred by Public authorities like Central, State
and local governments to satisfy the collective social wants of the people is
known as public expenditure

2) Reason of the growth public expenditure in Malaysia ?

Urbanisation :-
Urbanisation has led to increasing expenditure on civil administration.
Government expenditure on courts, police, transport, railways, schools and
colleges, public health measures, water and electricity supply, public parks,
libraries etc. have increased due to growth of towns and cities.

The spread of urbanisation is an important factor leading to the relative growth of public

expenditure in modern times. With the growth of urban areas, there has been an

increasing tendency of expenditure on civil administration.

Expenses on water supply, electricity, provision of transport, maintenance of roads,

schools and colleges, traffic controls, public health, parks and libraries, playgrounds, etc.

have increased enormously these days. Likewise, the expenditure on courts, prisons etc.

is increasing, especially in the urban sector.

Growing Population :-
A high growth of population naturally calls for increase in public expenses as
all state functions are to be performed more extensively^ Population growth
has made necessary for governments of most countries to spend increasing
amounts on education, health, infrastructure, subsidies and social security. In
2011, :he population of India has increased to 121 crores.

A high growth of population naturally calls for increase in the expenses as all State

functions are to be performed more extensively. Rising population also poses various

problems in poor countries. The State will have the added responsibility of solving such
 problems as food, unemployment, housing and sanitation. Further, overpopulated

countries like India will have to check the population growth. The State has, therefore, to

spend more and more on family planning campaigns every year.

Meeting Defense Needs.

It is expenditure on defence equipments, wages and salaries of armed
forces, navy and airforce etc. It is incurred by government to provide security
to citizens of country from external aggression.

The tremendous growth in public expenditure may also be attributed to wars and threats

of war in modern times. In the Second World War, countries like England incurred heavy

war expenditures, amounting to 15 million per day. Wars and threats of war and the

consequent defence needs compel governments to spend more and more on the

production of war goods.

Due to the invention of nuclear weapons, there is always the danger of foreign

aggression. International political situation is uncertain and insecure. Modern States are

already facing a cold war. As such, every nation has to prepare itself for strong defence.

The defence expenditure is thus continuously rising. It contains expenditure on war

materials, maintenance and growth of armed forces, naval and air wings, expenses on

the development of military art and practice, pensions to retired war personnel, interests

on war debt, cost of rehabilitation, etc.

Peacock and Wiseman have referred to the displacement effect in the post-war period

when higher taxes and higher revenue collection drive of the war period are continued by

the government, finding them easy and attractive. The displacement effect may further be

supplemented by a scale hypothesis, i.e., adoption of new social welfare schemes by

the government on a permanent basis.