Meaning:

Public expenditure is expenditure which is incurred by the government for its own maintenance and for prevailing the economic and social welfare of the people. Modern governments have to perform complex functions due to the increase urbanization and industrialized. The importance of public expenditure are.

Importance of Public Expenditure:

1. Public expenditure on production: When the Government incurs expenditure on the provision of education, medical facilities, housing etc. for the people it increases their efficiency and as a result their power to work also increases leading to an increase in the income in the same manner when the government spends on agriculture or industrial sector it increases the productivity capacity of the country. When the government wishes to attract productive resources the particular industry it starts giving financial assistant to search industries in the form of incentives Etc. thus, the productive resources of the country get  distributed among different industries with the help of public expenditure.
2. Public expenditure and investment: Public expenditure has the power to influence the economic life of a country when the expenditure on maintenance of law and order is incurred it creates confidence in the minds of the investors and encourages them to Undertake investment in the same manner when the economy and social overheads are created they motivate the producer to Undertake investment. The government can also provide financial assistance to and subsidies to the private sector to stimulate investment.
3. Public expenditure and economic growth: Public expenditure helps to promote economic development by developing social over heads and infrastructure. In India rapid economic growth with social justice is considered the most important objective in the country the government has been participating in the economic activities in a direct way.
4. Public expenditure and economic stability: Free market economy is characterized by economic instability because the economy suffers from business cycle. According to Keynes economics basic cause of depression is a deficient of aggregate demand. When public expenditure is increase especially in the form of direct public investment, it adds directly to the aggregate demand and results in an increase output and employment. During period of boom there is a need to cut down the excess demand and this is achieved by reducing the public expenditure. Thus public expenditure can help to bring about economic stability.
5. Public expenditure and Public Safety and Security: Government spending on defense, law enforcement, homeland security, and emergency services is essential for maintaining public safety, national security, and territorial integrity. Investments in defense capabilities and security measures help protect citizens, deter threats, and safeguard national interests.
6. Public expenditure and Environmental Protection and Sustainability: Public expenditure can be directed towards environmental conservation, pollution control, natural resource management, and sustainable development initiatives. Investments in renewable energy, conservation programs, environmental regulations, and green infrastructure contribute to environmental sustainability and mitigate the adverse impacts of human activities on ecosystems.
7. Public expenditure and Support for Innovation and Research: Governments allocate funds for research and development, innovation incentives, and technology transfer initiatives to foster innovation, scientific advancement, and technological progress. Public investment in research institutions, universities, and industry collaborations drives technological innovation, enhances competitiveness, and stimulates economic growth.

also read: explain the reasons for increasing public expenditure.