Match List-I (item of revenue expenditure) with List-II (what NCERT s…

Match List-I (item of revenue expenditure) with List-II (what NCERT says about it):

List-I		List-II
(A)	Interest payments	(I)	Committed expenditure with little scope for drastic reduction
(B)	Defence expenditure	(II)	Revenue expenditure even when some of it is meant for creating assets
(C)	Subsidies	(III)	Single largest component of non-plan revenue expenditure
(D)	Grants given to state governments	(IV)	A policy instrument which aims at increasing welfare

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (A) - (III), (B) - (I), (C) - (IV), (D) - (II)

All four are items of revenue expenditure.

List-I	List-II	Reason
(A) Interest payments	(III) Single largest component of non-plan revenue expenditure	Interest on market loans, external loans and reserve funds is the largest item.
(B) Defence expenditure	(I) Committed expenditure with little scope for drastic reduction	National security needs mean defence spending cannot be cut much.
(C) Subsidies	(IV) A policy instrument which aims at increasing welfare	Subsidies on food, fertilisers and exports are given to raise welfare.
(D) Grants given to state governments	(II) Revenue expenditure even when some of it is meant for creating assets	Grants are counted as revenue expenditure even if the states use some of them to build assets.

NCERT (2026-27): “Revenue Expenditure … It relates to those expenses incurred for the normal functioning of the government departments and various services, interest payments on debt incurred by the government, and grants given to state governments and other parties (even though some of the grants may be meant for creation of assets). …”

“… Interest payments on market loans, external loans and from various reserve funds constitute the single largest component of non-plan revenue expenditure. Defence expenditure, is committed expenditure in the sense that given the national security concerns, there exists little scope for drastic reduction. Subsidies are an important policy instrument which aim at increasing welfare. …”