The public expenditure management is a challenge to the government of India in the context of budget-making during the post-liberalization period. Clarify it. (250 words)
Public expenditure management refers to the processes and systems used by the government to allocate and manage public resources. In the context of budget-making during the post-liberalization period, public expenditure management has become a significant challenge for the government of India. Here’s how:
- Fiscal deficits: One of the significant challenges of public expenditure management is to ensure that government spending does not result in unsustainable fiscal deficits. The government must ensure that its spending is within its means and does not lead to a debt crisis.
- Efficient use of resources: Another challenge is to ensure that public resources are used efficiently and effectively. The government must prioritize its spending to ensure that it maximizes its impact on economic growth and social welfare.
- Infrastructure development: India’s infrastructure development is lagging behind, and the government must increase its expenditure on infrastructure to support economic growth. However, ensuring that infrastructure spending is effective and efficient is a significant challenge.
- Social sector spending: The government must increase its spending on social sectors such as education, health, and social welfare. However, ensuring that this spending is effective in achieving social objectives is a challenge.
- Corruption: Corruption is a significant challenge in public expenditure management, and it results in wasteful spending and ineffective use of resources. The government must ensure that its spending is free from corruption and malpractice.
To address these challenges, the government of India can take the following measures:
- Fiscal discipline: The government must ensure fiscal discipline by controlling its spending, increasing revenue generation, and reducing wasteful expenditure.
- Performance-based budgeting: The government must adopt a performance-based budgeting system to ensure that its spending is aligned with its objectives and results in tangible outcomes.
- Technological interventions: The government must adopt technological interventions such as e-procurement and e-governance to increase transparency and reduce corruption in public expenditure management.
- Public-private partnerships: The government can use public-private partnerships to increase efficiency in infrastructure development and social sector spending.
- Capacity building: The government must invest in capacity building to improve its ability to manage public expenditure effectively.
In conclusion, public expenditure management is a significant challenge for the government of India, especially in the context of budget-making during the post-liberalization period. The government must adopt fiscal discipline, performance-based budgeting, technological interventions, public-private partnerships, and capacity building to address these challenges effectively.