Recently the government did away with the classification between Plan and Non Plan expenditure What ...........

Economic Affairs Public Finance and Debt Management

Recently the government did away with the classification between Plan and Non-Plan expenditure. What could be the possible impacts of this move?

1. This will lead to reduction in the bias in favour of Plan expenditure

2. This will lead to allocation of more funds towards maintenance of existing infrastructure/capital assets.

3. The process of resource allocation and monitoring will become complex.

Select the correct answer using codes given below

1 and 2 only

2 and 3 only

1 and 3 only

All of the above

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Explanation:

The move will first of all lead to easing of the process of resource allocation and monitoring.
It will also address the bias in favour of plan expenditure due to populist nature of plan expenditure that led to neglect of the maintenance of existing capital assets.