Question : The "Plan and Non-Plan classification" in the government budget was replaced by:

Option 1: Revenue and Capital classification

Option 2: Current and Development classification

Option 3: Revenue and Expenditure classification

 

Option 4: Primary and Secondary classification

Correct Answer: Current and Development classification

Solution : The correct answer is (b) Current and Development classification.

The "Plan and Non-Plan classification" in the government budget has been replaced by the Current and Development classification. This change was implemented by the Government of India in the financial year 2017-2018.

Under the previous Plan and Non-Plan classification, government expenditure was categorized into Plan and Non-Plan components. The Plan expenditure included funds allocated for various planned programs and schemes, aimed at achieving specific developmental goals. Non-Plan expenditure encompassed regular recurring expenses such as salaries, pensions, and interest payments.

However, in an effort to streamline and rationalize budgetary allocations, the government transitioned to the Current and Development classification. Under the Current and Development classification, government expenditure is divided into Current Expenditure and Development Expenditure.

The change from Plan and Non-Plan classification to Current and Development classification was made to shift the focus from mere allocation of funds to more effective utilization and outcome-oriented spending.