Read the following statements:
Statement I: Revenue expenditure relates to the expenses incurred for the normal functioning of the government departments and various services.
Statement II: Plan expenditure is the more important component of revenue expenditure.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Statement I is true but Statement II is false.
Statement I: Revenue expenditure relates to the expenses incurred for the normal functioning of the government departments and various services. — True. Salaries and running costs keep the government working and create no asset.
Statement II: Plan expenditure is the more important component of revenue expenditure. — False. Non-plan expenditure is the more important component. It covers interest, defence, subsidies, salaries and pensions.
NCERT (2026-27): “Revenue Expenditure Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or financial assets of the central government. 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). … Non-plan expenditure, the more important component of revenue expenditure, covers a vast range of general, economic and social services of the …” |