UPSC Prelims 2014 · Question 40 of 100
UPSC Prelims 2014 question on Non Plan Expenditure
- ExamUPSC CSE
- Year2014
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicPublic Finance
- DifficultyMedium
- TypeStatement
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.
Show answer
Answer: C. 1, 2, 3 and 4
Verdict
The answer is 1, 2, 3 and 4. Defence expenditure, interest payments, salaries and pensions, and subsidies were all classified as Non-Plan Expenditure in the Union Budget.
Analysis
Under the plan and non plan classification then in use, Plan Expenditure covered spending on schemes and programmes forming part of the Five Year Plan, while Non-Plan Expenditure covered everything else, that is the routine and committed running costs of the state. Interest payments, defence, salaries, pensions and subsidies are the largest items of that committed category, which is why non plan spending was so much harder to compress than plan spending. All four listed items therefore qualify.
Source
NCERT Economics and Uma Kapila.
How to crack it
Use the definition as a sieve rather than recalling a list. Ask of each item, is this money spent on a Plan scheme. Interest on past borrowing, soldiers' pay, pensions and food and fertiliser subsidies are none of them Plan schemes, so all four fall on the non plan side. Note also that this classification was discontinued from the 2017 to 2018 budget, so treat the question as a test of the older framework and keep the revenue versus capital and revenue versus expenditure distinctions separate from it.