How to Reduce Governmental Expenditures?

One of the most important aspects of government affairs is fiscal budget which is usually developed annually. Government budget indicates public revenues and expenditures, which is often passed by legislature, approved by the head of executive and executed by finance ministry of that particular territory. Basically governmental or public expenditure refers to all those expenses and investments which are operated by government in order to provide appropriate quality of public services for the society.

In simple language, there are two kinds of expenditure within either federal or centralized system of governance i.e. (i) Operational budget and (ii) Development budget. All known government’s expenses can lie in one of these two categories. In fact these budgets concentrate more on expense dimension rather than revenue for many of the ministries except from some government organizations which have more revenue sources than expenditure such as custom. These two kinds of budgets are usually developed by different ministries or other independent bodies within government in address to finance ministry in order to prepare financial budget of the country during a fiscal year.

The balance of government fiscal budget has always been a controversial issue in most of the countries; and governments seek different policies and strategies to increase their revenues and decline their expenditures in order to avoid from budget deficit. Indeed, there are several strategies to overcome budget deficit or to reduce the governmental expenditure which this article would investigate some of them as following:

• Some of governmental agencies have many overlaps in their activities. Therefore removing this overlap and proper work division could be an appropriate strategy to decline the operational expenditure in huge extent.
• Decreasing the public services is always being used by different governments to prevent budget deficit in some particular fiscal years, in which the governmental revenue is declined due to some reasons such as financial crisis or improvement of other countries’ sales in world market which lead to decreasing market share for that country.
• Removing the middle men from governmental contracts; especially in development projects, could be another effective strategy to decline governmental spending.
• In acute situations which governmental expenditures are quite high from revenue, government has to reduce its expense through decreasing the level of salaries for its staffs and even reduce the governmental employees.
• Moreover declining subsidies are often used by governments which have socialist structure in order to decrease governmental expenditure.
• One of the most effective strategies to decline governmental expenditure which are also being defined as pillar of good governance is promoting transparency and accountability in governmental organizations. This strategy would eliminate corruptions within government and prevent from wastage of financial resources.