Previous Year Question
With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?
Defence expenditure
Interest payments
Salaries and pensions
Subsidies
Select the correct answer using the code given below.
1 only
2 and 3 only
1, 2, 3 and 4
None
Correct Answer: C
Detailed Solution
This question must be answered according to the Plan and Non-Plan Expenditure classification prevailing in 2014. At that time, all four given items were included in Non-Plan Expenditure.
Defence expenditure: Both revenue and capital expenditure relating to defence services were classified as Non-Plan Expenditure.
Interest payments: Interest paid by the Government on public debt and other liabilities constituted Non-Plan Expenditure.
Salaries and pensions: Salaries of government employees and pensions of retired employees were included in Non-Plan Expenditure.
Subsidies: Food, fertiliser, petroleum and other government subsidies formed part of Non-Plan Expenditure.
Non-Plan Expenditure was not synonymous with non-developmental expenditure. It could include both revenue and certain capital expenditures. For example, capital expenditure on defence was also treated as Non-Plan Expenditure.
Present position: The distinction between Plan and Non-Plan Expenditure was discontinued from the financial year 2017–18. Government expenditure is now principally classified as Revenue Expenditure and Capital Expenditure.