The correct answer is (a) Interest payment.
Interest payment is the most important item of non-plan expenditure of the Central Government during 2015-16 budget. It is the amount of money that the government pays to its creditors, such as banks and bondholders, for borrowing money. In 2015-16, the government’s interest payment was Rs. 5.93 lakh crore, which was about 13% of the total expenditure.
Subsidies are payments made by the government to individuals or businesses to reduce the prices of goods or services. In 2015-16, the government’s subsidy expenditure was Rs. 2.86 lakh crore, which was about 7% of the total expenditure.
Defence services are the armed forces of a country, which are responsible for protecting the country from external threats. In 2015-16, the government’s defence expenditure was Rs. 2.58 lakh crore, which was about 6% of the total expenditure.
Pensions are payments made by the government to retired employees. In 2015-16, the government’s pension expenditure was Rs. 1.64 lakh crore, which was about 4% of the total expenditure.
The government’s interest payment is the most important item of non-plan expenditure because it is a fixed cost that the government has to pay regardless of the economic situation. The government’s subsidy expenditure is also a significant item of non-plan expenditure, but it is more volatile than the government’s interest payment. The government’s defence expenditure and pension expenditure are also important items of non-plan expenditure, but they are smaller than the government’s interest payment and subsidy expenditure.