Welfare expenditure
Also called: welfare programmes · Topic: Government Budget, Fiscal Policy and FRBM · NCERT: Class 9, Ch 8 "Building Blocks in Economics: The Problem of Choice"
Meaning
Welfare expenditure is government spending on programmes that improve people's quality of life, especially for the poor and vulnerable. It is paid for mainly from tax revenue. It includes subsidies, pensions and cash support. Such transfers are also a tool of redistribution: they move income towards those who need it more.
Example
PM-KISAN pays farmers ₹6,000 a year straight into their bank accounts. Free foodgrains under PMGKAY were extended for five years from 1 January 2024. Both are welfare expenditure.
Don't confuse with
- Social sector expenditure: a wider head. It covers education and health as well as welfare, and it focuses on building human capital over the long run.
- Freebies: goods, services or cash given free. The debate is whether a given freebie is productive welfare or unsustainable populism that strains the budget.
Related concepts
- Revenue expenditure
- Capital expenditure
- Plan and non-plan expenditure
- Committed expenditure
- Interest payments
- Effective capital expenditure
- Social sector expenditure
- Wagner's law
- Peacock-Wiseman hypothesis