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Quality of Public Expenditure (QPE) Index
February 24 , 2025
10 days
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- The RBI has used data since 1991 to create the ‘Quality of Public Expenditure’ index to assess how well the government is spending its money.
- The index evaluates the following by the composition of spending and its impact on long-term economic growth.
- Capital Outlay to GDP Ratio measures the proportion of government spending on infrastructure and development projects relative to GDP.
- Revenue Expenditure to Capital Outlay Ratio Assesses the balance between day-to-day operational expenses and long-term investment.
- The Development Expenditure to GDP Ratio tracks public spending in healthcare, education, research, infrastructure, and social welfare.
- The Development Expenditure as a Percentage of Total Expenditure evaluates the share of productive investments in overall government spending.
- Interest Payments to Total Government Expenditure Ratio reflects the burden of government debt.
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