Q. Which of the following is NOT developmental expenditure?

[A] Construction of dams

[B] New railway lines

[C] Factories establishment

[D] Interest payments

Answer: D

Explanation: Total expenditure incurred by the government is classified into two segments —developmental and non-developmental.

  • All expenditures of productive nature are developmental such as on the heads of new factories, dams, bridges, roads, railways, etc.—all investments.
  • The expenditures which are of consumptive kind and do not involve any production are non-developmental, i.e., paying salaries, pensions, interest payments, subsidies, defence expenses, etc.

Source: TMH Ramesh Singh