of the GDP. Principles Governing Public Expenditure Rules or principles that govern the expenditure policy of the government are called canons of public expenditure. Findlay Shirras has laid down the following four canons of public expenditure: 1.Canon of Benefit – public spending must be done in a manner that it brings greatest social benefits. 2.Canon of Economy – it says that economy does not mean miserliness. Public expenditure must be made productively and efficiently. 3.Canon of Sanction – public spending should not be made without sanction of an appropriate authority. 4.Canon of Surplus – public expenditure should be done in a way avoiding deficit. Government must prepare budget to create a surplus. 5.Canon of elasticity- it says there should be enough scope in expenditure policy.government should be able to increase or decrease it according to the period. 6.Canon of productivity- public expenditure should encourage production efficiency of the economy. 7.Cannon of equitable distribution - expenditure policy should minimize inequalities and it should be designed in a way to benefit poorer sections. See also Expenditure incidence Government spending References Public finance Expenditure