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MEANING OF NON-PLAN EXPENDITURE

Question

MEANING OF NON-PLAN EXPENDITURE

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Solution

Non-plan expenditure refers to the government spending on the maintenance of the establishments, servicing of loans, public administration, relief on account of natural calamities, etc. It is the expenditure that the government incurs on all those items that are obligatory in nature.

Here's a step-by-step breakdown:

  1. Non-plan expenditure is a term used in government budgeting.

  2. It refers to the spending that the government does not have much control over. These are expenses that are more or less fixed.

  3. This includes spending on things like salaries of government employees, pensions, interest payments on the country's debt, subsidies, and grants given to state governments and other parties.

  4. It also includes spending on defense and security, as well as other essential functions of the government.

  5. In other words, non-plan expenditure is the cost of running the day-to-day operations of the government, as well as fulfilling its obligations and commitments.

  6. This type of expenditure is contrasted with plan expenditure, which is spending on new projects, programs, and initiatives. Plan expenditure is often seen as more discretionary and is where the government has more flexibility to increase or decrease spending.

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