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Role of Public Expenditure in A Developing Economy
Role of Public Expenditure in A Developing Economy
The private sector is either unable to find and invest these huge amounts or it is
unwilling because the return from such investments may be uncertain or long
delayed.
Minerals provide a base for further economic development. The government has to
undertake schemes of exploration and development of essential minerals, e.g., coal
and oil. Public expenditure has to play its role here too.
The Central Government gives grants to State governments and the State governments
to local authorities to induce them to incur some desirable expenditure. Subsidies
have also to be given to encourage the production of certain goods especially for
export to earn much-needed foreign exchange.