Which of the following statements about non-plan expenditures of the Central Government is correct?

The correct answer is The expenditure is on interest payments.

Key Points

• Non-plan expenditures of the Central Government (or Union Government) in India refer to government expenditures that are not part of the planned development activities and projects outlined in the Five-Year Plans.
• These non-plan expenditures are recurring or non-development expenditures that are necessary for the day-to-day functioning of the government. They cover a wide range of expenses and are typically categorized into two main components:
• Revenue Expenditure: This includes the day-to-day operational expenses of the government, such as salaries and wages of government employees, pensions, subsidies, interest payments on loans, maintenance of government offices and infrastructure, and other routine expenses necessary for the functioning of government departments and services. Hence option 1 is correct.
• Capital Expenditure: This category covers government spending on assets that have a long-term value. Capital expenditures include investments in infrastructure development, the purchase of assets like land, buildings, machinery, and equipment, and other items that contribute to the growth and development of the country. While this is not directly related to planned development, it is essential for the overall economic and social progress of the nation.