The correct answer is D. Grant to states.
Development expenditure is the expenditure incurred by the government on activities that are expected to lead to long-term economic growth and development. It includes expenditure on infrastructure, education, health, and other social services.
Grant to states is a type of revenue expenditure that is not considered to be development expenditure. It is a transfer of funds from the central government to the state governments, which is used to meet the current expenditure of the states.
The other options are all considered to be development expenditure.
A. Defence expenditure is expenditure on the armed forces, which is necessary for the security of the country.
B. Expenditure on economic services is expenditure on activities that promote economic growth, such as infrastructure development, agriculture, and industry.
C. Expenditure on social and community services is expenditure on activities that improve the quality of life of the people, such as education, health, and social welfare.