(a) Public expenditure refers to the expenses of the public authorities—Central, State and Local Government—either in protecting the citizens or in promoting their economic and social welfare and promoting economic development. 

Public expenditure promotes the economic development as follows: 1. Public expenditure on infrastructural development such as power, irrigation, transport etc. improves the production efficiency of industries and increases employment opportunities. 

2. It encourages private enterprises by initialising state-owned financial and banking institutions to provide cheap credits. 

(b) ‘Efficiency of labour’ implies the productive capacity of a worker to do more or better work or both during a specified period of time. 

Causes of Low Efficiency of Indian Labour: 

1. Climate: The hot and humid climate of most of the states of India is a factor that deprives the people of the capacity to work hard and the ability to display Iiigh efficiency. 

2. Wages not determined by efficiency: Workers have the incentive to become more efficient only if higher efficiency leads to higher income. This is, in many cases, not true in India. Sometimes, the employers are to blame for this. They do not give to the efficient workers the higher incomes that they deserve. 

3. Inadequate Training facilities: There is also dearth of training facilities for the workers in India. Even the workers who wish to receive special training (or the employers who wish to send their workers to such training programmes) cannot do so in view of the limited facilities. 

4. Poor Working Conditions: The poor and unhealthy working conditions in most of the Indian factories (specially in the unorganised sector) aggravates the problem of inefficiency of Indian workers.