13/03/2018
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Planned expenditure : Non-planned expenditure
and
Revenue expenditure : Capital expenditure
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Non-planned expenditure :
It is what the government spends on the so-called non-productive areas, such as salaries, subsidies, loans and interest.
Planned expenditure :
It pertains to the money to be set aside for productive purposes, like various projects of ministries.
The distinction between 'PLANNED' and 'NON-PLANNED' expenditure was ended from 2016-17 budget.
The plan to drop plan and non-plan expenditure came after the government had dismantled the Planning Commission. Earlier, the plan expenditure was estimated after discussions with all ministries and the Planning Commission.
Since, there is no Planning Commission, there is no need to have separate plan expenditure in the Budget
The government has planned to switch to "Capital and Revenue spending classifications. It helps to create a clear and effective link between the government’s earnings, spending and outcome.
Revenue expenditure includes interest payments, subsidies, wages to government employees, pensions, social services and so on. Any expenditure that does not lead to formation of any asset or liability for the government will fall under this category.
Capital expenditure, on the other hand, are the ones that create some liability/asset for the government. These include loans to public enterprises, loans to States, Union Territories and foreign governments and acquisition of valuables.
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