GOVERNMENT EXPENDITURE AND ECONOMIC GROWTH IN NEPAL: A DISAGGREGATED ANALYSIS
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Abstract
Nepal has been implementing periodical economic plan for economic development since late 1950s. There is increasing trend in government expenditure by every year. The Gross domestic product (GDP) growth rate is substantial if it can deliver economic development. However, Barma (2010) found that Nepalese public expenditure rate is more than that of nominal growth rate of GDP. Further, he mentioned that there is
increasing dependency on foreign loan to fulfill the large requirement of resources for principal repayment and loan interest and to accomplish the increasing resource gap.“Nepal’s hydro-power potential is considered as the second highest in the world but the country is troubled by the frequent power outages.
Description
The citizen's financial and social well-being is important for the growth and such activities is measured by the total government outlay which is composed of all governmental expenditure.
The government spends money on the delivery of products and services that are crucial for the wellbeing of the country but are not offered by the private sector. Governments also support emerging industries or sectors like agriculture and transportation that can't grow their businesses through private sector investment. The nation's defense, infrastructure, health, and welfare are all supported by government spending.