Changes in Government Expenditure Video Lecture | Economics Class 12 - Commerce

hi guys weapon here I wasn't well these
last few days so I couldn't make a video
on time but let's get to the topic at
hand in my last video I spoke about the
fiscal policy with respect to the amount
of money the government makes that is
the sources of revenue for the
government remember that the fiscal
policy is about how much money the
government makes and how much it spends
in today's video we will see the various
expenses of the government the expenses
of the government of India can be
divided into planned and unplanned
expenses a planned expense is something
which comes on to the five-year plans
proposed by the government of India non
planned expenses are those related to
agricultural subsidies subsidies for
fuel LPG etc one of the key aspects of
2015-16 fiscal policy is the need to
develop a debt market for common
securities the government raises money
from the public or has foreign debt to
pay for the various expenses it occurs
why do they do this because it is an
effective method think of it like this a
government needs to pay a huge import
bill for oil in December 2015 but they
don't have the necessary funds for this
so what they do here is they raise the
money by selling Treasury bills or
government bonds to pay this let's say
they raise money via Treasury bills
which have a 90 day maturity that is
they should be repaid sometime in March
2016 by March 2016 the money is
collected in the form of income taxes
and this is used to repay the Treasury
bill holders this is how the government
manages to or rather pays for its
expenses it occurs let me explain the
major expenses for the Indian government
first is crude oil we do not have enough
domestic reserves to meet the
requirements so we import from Iran did
you know that the Kospi import from Iran
America isn't always in good relations
with us America does not like Iran but
we support Iraq so America never fully
supports us we spend around one hundred
and forty three billion dollars each
year on crude oil imports our imports on
and precious metals are around sixty
billion dollars the import a lot of gold
because there is a massive domestic
demand for the commodity I think you
know this by now in India people buy
gold for the smallest of occasions
another major expense for the government
is defence India is surrounded by
threats in the North Pakistan and China
have been quite aggressive with India so
to minimize the threat we need to spend
a lot on our defence
why doesn't India make most of the
defence my theory is that we do have
adequate defense made within India but
we need a lot more to combat the threats
from Pakistan and other foreign nations
almost every day we see news that
Pakistan has violated ceasefire
agreements or a terrorist infiltration
has happened across the border the
fiscal policy of 2015 and 16 has
allotted around 37 billion dollars for
defense expenditure we import defense
from Russia Germany Sweden Israel
America UK and France Russia is the
chief contributor to India's defense
finally another big expense for the
Indian government are subsidies
especially the subsidies on agriculture
and LPG the subsidy budget is almost the
same as the defense budget subsidies on
agriculture alone are at 20 billion
dollars anyway guys thank you for
watching this video in the next video I
will explain the monetary policy so stay
tuned for that please subscribe to my
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thank you all bye