Question

Distinguish between productive and unproductive public expenditure, citing an example of each.

Answer 1

Productive Expenditure	Non-productive Expenditure
Productive expenditures are those expenditures which help in improving the productive capacity of the economy.	Non-productive expenditures, on the other hand, are those expenditures which do not add to the productive efficiency of the economy directly.
Helps in economic growth and development.	Mainly for welfare, administration, or defence, without increasing output.
May yield economic returns in the future.	Does not generate direct returns.
Example: building infrastructure like roads, bridges, and factories.	Example: spending on the military, police, pensions, and salaries.