Question

What was the drawback of the Plan/Non-Plan classification of expenditure?

Options

• It resulted in excessive creation of physical and financial assets

• It led to neglect of maintenance and created a misperception that non-plan expenditure was inherently wasteful

• It made interest payments impossible to classify

• It eliminated all grants given to state governments

Answer 1

The Plan/Non-Plan classification led to neglect of maintenance and created a misperception that non-plan expenditure was inherently wasteful. This adversely affected sectors like education and health, and the classification was later discontinued.