Classification of Expenditure MCQs with Explanations
Practice MCQ Questions
Ques: 1
At present, where from the maximum resources are mobilised for India's public expenditure under plans?
Correct Answer:
(D)
From borrowings
At present, the maximum resources are mobilised from borrowings for India’s public expenditure under plans. Public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. The sources of public debt are dated government securities (G-Secs), treasury bills, external assistance, short-term borrowings and securities issued against small savings (Public account).
Ques: 2
Consider the following statements:
Revenue expenditures incurred for the basis other than the creation of physical or financial assets of the central government.
These are associated with the expenses incurred for the normal operations of the government divisions.
Which of the statements given above is/are correct?
Correct Answer:
(C) Both 1 and 2
Revenue expenditures are the expenditures incurred for the basis other than the creation of physical or financial assets of the central government. These are associated with the expenses incurred for the normal operations of the government divisions and various services, interest payments on debt sustained by the government, and grants given to state governments and other parties (even though some of the endowments might be meant for the creation of assets).
Ques: 3
Consider the following statements:
A plan revenue expenditure is associated with central plans (the Five-Year Plans), and central aid for state and union territory plans.
Non-plan expenditure covers a broad degree of general, economic, and social services of the government.
Which of the statements given above is/are correct?
Correct Answer:
(C) Both 1 and 2
Budget documents allocate total expenditure into plan and non-plan expenditures. These are shown in item 6 on the table within revenue expenditure, a distinction is made between plan and non-plan. According to this categorisation, a plan revenue expenditure is associated with central plans (the Five-Year Plans), and central aid for state and union territory plans.
Non-plan expenditure, the more significant component of revenue expenditure, covers a broad degree of general, economic, and social services of the government. The main objects of a non-plan expenditure are interest payments, defence services, subsidies, salaries, and pensions.
Ques: 4
The main objects of a non-plan expenditure are:
Correct Answer:
(D)
All of the above
Non-plan expenditure, the more significant component of revenue expenditure, covers a broad degree of general, economic, and social services of the government. The main objects of a non-plan expenditure are interest payments, defence services, subsidies, salaries, and pensions.
Ques: 5
The classification of government expenditure is closely linked to the goals of the government, such as:
Correct Answer:
(D)
All of the above
There are two categories of revenue expenditure: both expenditures for development and non-developmental purposes. The classification of government expenditure is closely linked to the goals of the government, such as price stability, financial control, economic growth, and so on. For instance, the accounting classification of expenditure into "Plan" and "Non-Plan" categories, as well as "Capital" and "Revenue," enables Parliament to exercise financial control over expenditure and the government's spending departments. Classification of Costs: There are four broad categories of government expenditures: Functional or budget classification, economic classification, cross classification, and accounting classification are the four types of classification.