A Study on Public Expenditure in India Since Independence

Abstract

This working paper examines the progression of public spending in India since its independence in 1947, analysing its development within the framework of economic policies, political dynamics, and social concerns. In the post-independence period, India's public spending was primarily influenced by the need to create a self-sustaining economy, including substantial expenditures in infrastructure, public services, and critical industries such as agriculture and industry. Gradually, the emphasis of spending transitioned towards attaining welfare goals, including poverty reduction, healthcare, education, and rural development. The article examines the influence of several Five-Year Plans on government expenditure, emphasising the gradual transition from a centrally planned economy to a more market-oriented one, particularly after the economic changes of 1991.  This analysis explores the function of fiscal federalism and the increasing influence of state governments on public spending, highlighting the problems and intricacies of managing public finances in a varied and populous nation. In conclusion, the article contends that while India has achieved notable progress in its public spending strategy, issues pertaining to efficiency, accountability, and sustainability persist in influencing the conversation on fiscal policy. It necessitates a more open and results-oriented methodology to guarantee that public expenditure adequately meets the country's changing requirements.