The following are some of the items of expenditure of the Central Gove

The following are some of the items of expenditure of the Central Government in India :

Join Our Telegram Channel

Interest payments
Major subsidies
Pensions
Loans and advances

Which of the above is/are included in non-plan revenue expenditure?

1 only

2 and 3 only

1, 2 and 3

2, 3 and 4

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC CAPF – 2013

Download PDF Attempt Online

The correct answer is C) 1, 2 and 3. Interest payments, major subsidies, and pensions are all significant components of the Central Government’s non-plan revenue expenditure.

– Government expenditure in India is classified into Revenue Expenditure and Capital Expenditure, and traditionally also into Plan and Non-Plan Expenditure. Non-Plan Expenditure constitutes the largest part of the government’s total expenditure.
– Revenue Expenditure includes all those expenditures of the government that do not result in the creation of physical or financial assets. Non-Plan Revenue Expenditure covers the essential running costs of the government and various obligations.
– Item 1: Interest payments on the national debt are a major component of non-plan revenue expenditure, representing the cost of borrowing.
– Item 2: Major subsidies provided by the government (like food, fertilizer, petroleum) are also part of non-plan revenue expenditure, aiming at social welfare or economic support.
– Item 3: Pensions paid to retired government employees are also classified as non-plan revenue expenditure.
– Item 4: Loans and advances given by the Central Government to states, union territories, public sector undertakings, or other parties are typically classified as Capital Expenditure because they are financial assets for the central government (recoverable advances).

While the distinction between Plan and Non-Plan expenditure has been discontinued since the abolition of the Planning Commission and Five Year Plans, the question likely refers to the classification prevalent during the period the question might have originated from, where these items were standard non-plan revenue expenditures. The new classification is between Revenue and Capital expenditure, and within that, expenditure is classified by function. However, the nature of these specific items (Interest Payments, Subsidies, Pensions as revenue; Loans & Advances as capital) remains consistent across classifications.

More similar MCQ questions for Exam preparation:-