UPSC Prelims 2014 GS Paper I · Q100 / 100 Economy easy

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.

  1. (a) 1 only
  2. (b) 2 and 3 only
  3. (c) 1, 2, 3 and 4 ✓ UPSC's answer
  4. (d) None

Why the answer is (c)

• Until 2017–18 the Union Budget divided expenditure into Plan (schemes under the Five-Year Plans) and Non-Plan.

• Non-Plan expenditure covered the Government's committed and routine outgo — defence (1), interest payments (2), salaries and pensions (3), subsidies (4), grants to States and loans to PSUs.

• All four items were Non-Plan; the distinction was abolished in favour of revenue/capital classification.

• Hence 1, 2, 3 and 4, option (c).

Why the other options are wrong

(a) 1 only
Interest, salaries and subsidies were also Non-Plan.
(b) 2 and 3 only
Defence and subsidies were also Non-Plan.
(d) None
All four were Non-Plan items.

Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2014, held on 24 August 2014. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.

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