General Knowledge - Indian Economy - Discussion

India's GDP grows at 8.5% in FY-2011, Q4 growth at 7.8%, Confirming fears of a slowdown, India's economy grew by just 7.8 per cent in the fourth quarter ending March this year, mainly due to poor performance of the manufacturing sector, as against 9.4 per cent in the same three-month period of the previous fiscal.

However, economic growth, as measured by the Gross Domestic Product, improved to 8.5 per cent in 2010-11 from 8 per cent in 2009-10 due to better farm output and construction activities and financial services performance.
So, Please refer Mr. Assif

A) Defence expenditure.

Explaination-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 non-development expenditure.

In our country most of the exp.is non developmental in nature like deffence exp.as it does not add to our national output in keynessian sence. if this exp will be spent on productive activities our economy will grow as compared to previous year it is expected this year GDP WILL be only 6.9 % compared to 8 %in the previous year as investment rate is low so govt should take effective measures to increase our MPI

Defense expenditure could be a part of economic development, because doesn't this provide a safer place for people to reside, therefore attracting more tourist to a country. Due the this there will be a greater inflow of money, improving welfare for all. Also aren't foreigners more likely to invest in a country that has lower crime rate and at least some political stability.

Development expenditure is the money spent by the government on developmental and welfare programmes. Expenditures on economic services, expenditures on social and communist services, and grants to states are examples of developmental expenditures.

Among the given options, defence expenditure is not an example of developmental expenditure.

Yes, development expenditure does not include defense expenditure by central government but I think that there should be consider defense expenditure as developmental expenditure because today India is not safe by her enemy countries and terrorist. So govt. Should increase expenditure in defense.

It counts just as an investment which may or may not be used in the future and apart from that, no Indian citizen is going to be benefited from that money that's why we cannot consider as the part of development.

The other options are fairly valid and can be counted as developmental processes.

If think about countries long term stability with out any interruption of civil wars, help to development in all the aspects of the economy and this will be a development expenditure when consider the damage's and interruption done by the civil wars and creation instability of the economy.

India spent a lot of percentage of GDP on defense expense, however simply this reason can not change its characteristics to development exp. Defense expenditure is for sure incurred for safety and security of state and its people, so it should not included in development category.

According to me, any expenditure can't be a grant to any government, however, defence expenditure can be development expenditure for their respective department. It will be inappropriate to say for this perticular que that this is not defance expenditure. Answer should be IV.