from year 1980. During 1980-1996 period the public expenditure share even declined in many countries, for example United Kingdom, Belgium, Netherlands etc. Present Since the late 1980s, the average public expenditure to GDP ratio is increasing slowly. The only industrialized countries that reduced significantly are New Zealand, Ireland and Norway. One of the reasons is growing skepticism about governmental intervention in the economy. Causes of growth of public expenditure There are several factors that have led to an enormous increase in public expenditure through the years 1) Defense expenditure due to modernization of defense equipment by the navy, army and air force to prepare the country for war or for prevention causes-for-growth-of-public-expenditure. 2) Population growth – It increases with the increase in population, more of investment is required to be done by government on law and order, education, infrastructure, etc. investment in different fields depending on the different age group is required. 3) Welfare activities – welfare, mid-day meals, pension provisions etc. Provision of public and utility services – provision of basic public goods given by government (their maintenance and installation) such as transportation. Accelerating economic growth – in order to raise the standard of living of the people. Price rise – higher price level compels the government to spend an increased amount on purchase of goods and services. Increase in public revenue – with the rise in public revenue government is bound to increase the public expenditure. International obligation – maintenance of socio-economic obligation, cultural exchange etc. (these are indirect expenses of government) 4) Wars and social crises – fighting amongst people and communities, and prolonged drought or unemployment, earthquake, hurricanes or tornadoes may lead to an increase in public expenditure of a country. This is because it will involve governments to re-plan and allocate resources to finance the reconstruction. 5) Creation of super national organizations – E.g., the United Nations, NATO, European community and other multinational organizations that are responsible for the provision of public goods and services on an international basis, have to be financed out of funds subscribed by member states, thereby adding to their public expenditure. 6) Foreign aid – Acceptance by the richer industrialized countries of their responsibility to help the poor developing countries has channeled some of the increased public expenditure of the donor country into foreign aid programmes. 7) Inflation – This is the general rise in the price level of goods