Capital Expenditure, Recurring Expenditure, and Development Planning Comments on Dr. Huda's Address

M. Akhlaqur Rahman


The purpose of this note is to discuss the nature of the
problems created -by the "impact of the capital expenditure on the
subsequent liabilities of re¬curring expenditure"1 of the government and
to suggest certain remedies for either eliminating or reducing such
problems. The problem, as stated below, basically relates to the
financial planning of development projects. The installation of a
development project involves capital costs. The running of the project,
after its completion, involves the costs of operation and maintenance,
i.e., the recurring costs. The purpose of * financial planning is to
maximize the surplus of returns over the costs of opera¬tion, including
the maintenance and replacement costs.

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