General Knowledge - Indian Economy - Discussion

@Jeyapriya.

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.

I am confused about the answer, as subsidies and interest payment come under non-development expenditure. Anyone please explain me the answer?

First you know simple meaning non-developement expenditure is one-way process.

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

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.

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?

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.

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.

Can any one please explain how subsidies are considered as development expenditure and why defense is not a development expenditure?

What is development and non development expenditure ? And interest payment too. Can someone clarify it, please.

Subsidies are development expenditure it does not non development expenditure because it provide for development of industry.