Given below are two statements: Statement I: The development expenditure of the Central Government does not include defense expenditure and grants to states. Statement II: Non-development expenditure involves Interest payments and Subsidies. In light of the above statements, choose the most appropriate answer from the options given below:
Question:
Given below are two statements: Statement I: The development expenditure of the Central Government does not include defense expenditure and grants to states. Statement II: Non-development expenditure involves Interest payments and Subsidies. In light of the above statements, choose the most appropriate answer from the options given below:
Given below are two statements: Statement I: The development expenditure of the Central Government does not include defense expenditure and grants to states. Statement II: Non-development expenditure involves Interest payments and Subsidies. In light of the above statements, choose the most appropriate answer from the options given below:
Options
Answer: (3) Statement I is correct and Statement II is incorrect
Explanation:
Statement I is correct: In India's budget classification, development expenditure covers social and economic services (education, health, agriculture, infrastructure etc.) and does NOT include defence expenditure or grants to states — those fall under non-development (revenue) expenditure categories. Statement II is incorrect: Non-development expenditure includes interest payments, defence expenditure, administrative expenditure, and pensions. Subsidies are generally classified under development expenditure (economic services) in Indian budgetary practice, not non-development expenditure.
Explanation:
Statement I is correct: In India's budget classification, development expenditure covers social and economic services (education, health, agriculture, infrastructure etc.) and does NOT include defence expenditure or grants to states — those fall under non-development (revenue) expenditure categories. Statement II is incorrect: Non-development expenditure includes interest payments, defence expenditure, administrative expenditure, and pensions. Subsidies are generally classified under development expenditure (economic services) in Indian budgetary practice, not non-development expenditure.
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