Nepal’s macroeconomic situation
Nepal is a small country having population of 27.47 million with GDP per capita about
US $ 399.70 (2012). Nepal’s economic growth rate remained 3.6% in the last year against
the prediction of 5.5% as Nepal performed poorly in the overall economic front. Poor
economic development/growth can be due to various factors but one of the major factors
that this report points out is government expenditure. It is necessary on the part of the
state to assume the responsibility of creating infrastructure needed for progress, stability
and growth of the economy. Importance of government expenditure in economic
development of country like Nepal lies in promoting private initiative, increasing growth
rate, raising incomes, reducing inequalities of income and wealth , and maintaining
macroeconomics stability.
In simple word, Government expenditure refers to the expenses made by public
authorities i.e. state Government, centre government and other local bodies to satisfy the
common wants of the people. In other word, Government expenditure refers to the
expenses incurred by the government for the maintenance of the government and to
preserve the welfare of society as a whole. Normally government expenses is done on
