Analysis Of Government Spending, Economic Growth Andhuman Development In Pakistan

According to Barro (1990), productive government spending will robust impact on growth rate in the long run. Government spending is the main determinant of economic growth and human development. Many studies recommended that rise in government spending influence positively to enhance the economic growth and human development as well. Government spending on health and education sectors increases the productivity of labor and rise the human development. According to World Development Indicators (WDI) 2015, more than 50 percent of Pakistan’s population are living below the poverty line. Pakistan’s Human Development Index (HDI) for 2015 was very low. According to UNDP, Pakistan has gotten 147 position of Human Development Index (HDI) in 2015.

Economic growth of Pakistan still instable due to numerous causes for instance so called governance, smaller amount of government spending on productive activities, high inflation rate, energy shortage, high rate of corruption, political unrest and terrorism etc. Economic Growth depend upon different sectors like agriculture, industrial and service sectors. In fact, agriculture growth stood at 2.9 percent in 2015. The growth of industrial sector was recorded at 3.62 percent in 2015.In Pakistan, GDP growth is 4.24 percent in 2015 (GOP, 2015) but economic growth is volatile over the time.

According to World Bank, government spending in the Pakistan was only 1.5 percent growth in 2014. Government of Pakistan was spend only 2.1 percent of its GDP on education sector and almost 1 percent on health sector in 2015. On the other hand, Pakistan’s expected population was more than 190 million in 2015. Still, total number of employed people in 2014 were just 56.52 million. Public debt was recorded at Rs.16, 936 billion or 61.8 percent of GDP.It’s so high, government of Pakistan should decrease the public debt that is the big reason in the volatility of economic growth in Pakistan (GOP,2015). It’s quite serious issue, not only to discuss but also need to tackle it by proper management. Government of Pakistan spend a smaller amount for the welfare of people which become responsible to volatility of the economic growth in Pakistan over the time. On the other hand, government spending generally based on non-productive spending which is accompanied by a decline in income and human development.

Government of Pakistan should confirm that capital spending and recurrent spending are accurately managed to enhance the growth and human development. Government of Pakistan should spend on poor farmers to enhance the growth. Government of Pakistan should more spend on productive sectors such as education, health to rise the human development.