Question
UPSC Prelims 2014 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:
Answer (Detailed Solution Below)
Option 3: 1, 2, 3 and 4
Detailed Solution
Explanation:
- The government's total spending can be divided into two broad sub-heads, planned expenditure and non-planned expenditure. non-planned expenditure constituting the bulk of expenditure.
- Non-plan expenditure is what the government spends on the so-called non-productive areas and is mostly obligatory in nature. It includes salaries, subsidies, loans, interest and defence expenditures.
- Plan expenditure, on the other hand, pertains to the money set aside for productive purposes like various projects of ministries. It is spent on productive asset creation through Centrally-sponsored programmes and flagship schemes.
- Plan and non-plan expenditure has now been replaced by capital and revenue spending classification.
Therefore, option (3) is the correct answer.
Subject: Economics | Public Finance
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