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In India, expenditure on poverty alleviation programmes is considered apart of
Capital expenditure as it augments the human resources of India
Revenue expenditure as it is largely a consumptive expenditure
Non-tax expenditure as such programmes must be financed fromborrowing
Any of the above depending on how the programme is designed
All expenditures incurred by the government are either of revenuekind or current kind or compulsive kind. The basic identity of suchexpenditures is that they are of consumptive kind and do not involve creationof productive assets. They are either used in running of a productive process or running agovernment. A broad category of things that fall under such expenditures inIndia are: • Interest payment by the government on the internal and external loans; • Salaries, Pension and Provident Fund paid by the government togovernment employees; • Subsidies forwarded to all sectors by the government; • Defence expenditures by the government; • Postal Deficits of the government; • Law and order expenditures (i.e., police & paramilitary); • Expenditures on social services (includes all social sector expenditures aseducation, health care, social security, poverty alleviation, etc.) andgeneral services (tax collection, etc.); • Grants given by the government to Indian states and foreign countries.
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