With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?

1. Defence expenditure
2. Interest payments
3. Salaries and pensions
4. Subsidies

Select the correct answer using the code given below.

[UPSC Civil Services Exam – 2014 Prelims]

(a) 1 only

(b) 2 and 3 only

(c) 1, 2, 3 and 4

(d) None

Answer: (c)        

Explanation:

• All expenditures which are done in the name of planning were called plan expenditures while the rest are placed under non-plan expenditures.
• The government of India has now scrapped the plan and non-plan expenditures in budget exercise and are replaced by capital and revenue spending classifications.

Non-plan expenditure is spread across:

• Expenditure incurred on Defence Services
• Interest payments for debt
• Subsidies (food, fertilisers, etc.)
• Salaries and pensions of employees in various government services
• Economic services by the government such as Agriculture, Industry, Power, Science & Technology,
• Loans and grants
• Social services such as healthcare, education, social security
• Police, etc.