Question

Government Expenditure in a Budget consists of _____________.

• A. developmental expenditure
• B. non-developmental expenditure
• C. both (a) and (b)
• D. neither (a) and (b)

Answer 1

The correct option is C both (a) and (b)

Government expenditure refers to the purchase of goods and services, which include public consumption and public investment, and transfer payments consisting of income transfers (pensions, social benefits) and capital transfer.
Development expenditure includes defence and security, economic services, social services and general administration.
Non development expenditure is that expenditure which is incurred on non-development activities of the Government in the form of provision of general services of the Government.
Example: administrative expenditure, interest payments, defence, external affairs etc.