A case has been put forth against classifying government expenditure into plan and non-plan expenditure. One ground given is that this classification has:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → led to new schemes being started while existing capacity is not maintained
The case against the plan and non-plan split is that it led governments to start new schemes and neglect the maintenance of what already exists.
It also created the wrong idea that non-plan spending is wasteful, which hurt sectors like education and health.
NCERT (2026-27): “A case against this kind of classification has been put forth on the ground that it has led to an increasing tendency to start new schemes/projects neglecting maintenance of existing capacity and service levels. It has also led to the misperception that non-plan expenditure is inherently wasteful, adversely affecting resource allocation to social sectors like education and health where salary comprises an important element.” |