General Knowledge - Indian Economy - Discussion

Discussion :: Indian Economy - Indian Economy (Q.No.8)


Since independence, both development and non-development expenditures have increased; the increase in the former being a little more than in the other. Non-development expenditure involves

  1. interest payments
  2. subsidies
  3. defence
  4. irrigation

[A]. I, II
[B]. I
[C]. I, II, III
[D]. II, III, IV

Answer: Option C


No answer description available for this question.

Somesh said: (Jul 11, 2010)  
Defence also is a non-development expenditure.

Madhu said: (Jul 16, 2010)  
I agree and subsidies comes under development.

S S Chaudhary said: (Oct 2, 2010)  
In govt budget every year defence expenditure is shown as non development expenditure.

Sundar said: (Oct 2, 2010)  
Public expenditure in India basically constitutes capital and revenue expenditure. These are included in central plan expenditure, central assistance and non-development expenditure.

Central plan expenditure is for the allocation of resources in development schemes given in plans of the central government and public sector undertakings. Central assistance is the aids provided for plans of state governments and union territories. Capital defence expenditure, loans for public enterprises, states and union territories and foreign governments fall under non-development capital expenditure. Whereas non-development revenue expenditure consists of revenue defence expenditure, subsidies, postal deficit, administrative expenditure, pensions, debt relief to farmers etc.

Vidushi said: (Feb 21, 2011)  
I agree defence comes under non-development expenditure.

Naveen Kumar said: (Mar 6, 2011)  
When defence comes under non-develoment exenditure then how answer can be interest payments AND subsidies ?


Ankit said: (Apr 6, 2011)  
# Non-development Revenue Expenditure.
~ The part of the revenue expenditure that may not contribute to the economic development of the nation is known as non-development revenue expenditure.
~ These include activities such as:
^ Administration of Government Organisations.
^ Maintenance of defence establishments.
^ Interest payments.
^ Subsidies on food, fertilizers, etc.

Snigdha Mukherjee said: (May 12, 2011)  
Defence falls under the category of non-develpomental expenditure then how come. Can option a b the answer?

Swati Popli said: (Aug 29, 2011)  
Defence comes under non developmental expenditure so the answer should also include Defence as non developmental expenditure. Further in my opinion subsidies are provided for the development of the economy to help some particular sector or Industry in its growth then this should also be included in the Developmental expenditure. Can any one please clarify this.

Regis said: (Jan 9, 2012)  
I can't understand this please Clarify?

Nityasundar Manik said: (Jan 12, 2012)  
Interest payment, defence, subsides are unproductive in nature.Because these add nothing to GDP .

Srikar said: (Mar 23, 2012)  
Yes, it is true that defence, interest payment, subsidies are unproductive whereas irrigation constitutes for the development of crops in the field of agriculture. Hope you convinced.

Reema said: (Jun 5, 2012)  
Expenditure, which increase productivity is called development expenditure.

Venkatesham said: (Dec 21, 2012)  
Interest payment, defence, subsides are unproductive in nature. Because these add nothing to GDP.

Pankaj Adhikari said: (Jun 22, 2013)  
In interest payment interest are paid to the government, which increases the economy of a country so should be developmental expenditure.

Deependra Singh said: (Oct 3, 2013)  
In my opinion defence, interest payment and subsidies are in non development expenditure.

Mohith Mathew said: (Oct 29, 2013)  
Subsidies and interest payment can be for developmental undertakings also. For example, subsidies on construction materials can lead to structural development, subsidies on new farming technologies can lead to agricultural development etc, likewise interest paid on developmental loans.

Ravi said: (Nov 6, 2013)  
Why subsidies not come under development?

Salunke Lixan said: (Nov 22, 2013)  
Subsidies are development expenditure it does not non development expenditure because it provide for development of industry.

Ashu Singh said: (Feb 9, 2014)  
What is development and non development expenditure ? And interest payment too. Can someone clarify it, please.

Srivalli said: (Feb 27, 2015)  
Can any one please explain how subsidies are considered as development expenditure and why defense is not a development expenditure?

Jitendra Kumar said: (Nov 24, 2015)  
Defenses comes under the securities and protection expenditure. In my opinion subsidies are considered as development expenditure because it is provide the government for the financial support.

Subham said: (Mar 4, 2016)  
1, 2 and 3 above are the right answers, because particularly in Defense Sector there is a huge expenditure involved. Secondly paying interest there is no economic development. Lastly payment of subsidy in various fields effect to reverse in economic by which these are the non-development expenditures.

Pooja said: (Nov 26, 2016)  
I doubt with the answer as in previous question subsidies has been included in development exp.
Also, the subsidy is being adjusted before calculating national income at market price from available at factor price and vice versa. Interest and defence can be the right answer. As interest is not directly related to growth but anyone clarifies about subsidy?

Varinder Waris said: (Dec 17, 2016)  
All expenditures that promote economic growth and development are termed as development expenditure.

Expenditure on infrastructure development, public enterprises or development of agriculture increase productive capacity in the economy and bring income to the government.

Expenditures in the nature of consumption such as Defence, interest payments, expenditure on law and order, public administration, do not create any productive asset which can bring income or returns to the government are a non-development expenditure.

So, the non-development expenditure are:

i) Interest payments.
ii) Subsidies.
iii) Defence.

Yash said: (Sep 17, 2017)  
First you know simple meaning non-developement expenditure is one-way process.

Govt nothing get return. Please understand one-way process meaning.

Jeyapriya said: (Apr 13, 2018)  
I am confused about the answer, as subsidies and interest payment come under non-development expenditure. Anyone please explain me the answer?

Aditya said: (Apr 19, 2018)  

Yes, it is right, that interest payment & subsidies are a non-development expenditure.

Subsidy like subsidy on education loan & other subsidy given by govt. These subsidies didn't make any return, profit, these are just an expenditure for gov. Therefore subsidy comes under non-development expenditure.

Same as with interest payment.

Hope its helpful.

Post your comments here:

Name *:

Email   : (optional)

» Your comments will be displayed only after manual approval.