Question

Why defence expenditure in india comes under non-plan expenditure? Doesn't it create assets?

Answer 1

The total defence outlay for 2015-16 is 2,46,727 cr out of which Rs 94,588 crore is earmarked for capital expenditure and the balance for revenue expenditure. The entire allocation comes under non plan expenditure (both revenue as well as capital)

Thus, just because it is classified as non plan expenditure in the budget does not mean it does not have any capital component.

One can ask the question as to why does defence come under non plan and not under plan expenditure. Well, Defence is a recurring annual expenditure and is not a part of the five year plans. Only five year plans prepared by the erstwhile Planning Commission comes under plan expenditure


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