Developmental and Non Developmental Expenditure

(i) Developmental Expenditure

Developmental expenditure refers to the expenditure of the government which helps in economic development by increasing production and real income of the country. Some people call it productive expenditure because it helps in increasing production and productivity of the economy.

Developmental expenditure on revenue is divided into developmental expenditure on revenue account and developmental expenditure on capital account.

(ii) Non Developmental Expenditure

it refers, to those expenditure of the government which does not directly help in economic development of the country. Cost of tax collection, cost of audit, printing of notes, internal law and order, expenditure on defence etc. are treated as non-developmental expenditure. Pension to retired govt. employees, non-developmental assistance to states are also included in this category. Non-Developmental expenditure may be non-developmental revenue, expenditure and non developmental capital expenditure.

Development and Non-Development Expenditure

Developmental Expenditure	Non-Developmental Expenditure
It helps in economic development of the country directly. Social and community services, economic services and developmental assistance to states are included in it. Developmental expenditure has a definite objective to achieve during the plan period. The share of developmental expenditure is gradually decreasing.	It does not directly help in the economic development of the country. Defence expenditure, police, pension, loan repayments, cost of tax collection, non-development assistance to states etc. are included in it. It is not possible to fix the targets and achieve it under non-developmental expenditure.       4. The share of Non-Developmental expenditure is           gradually increasing