Plan Expenditure

Since 1987-88, the public expenditure in India has been reclassified as plan and non plan expenditure. Plan expenditure refers to those expenditure incurred by the government to carry out the plans and projects recommended by the planning commission. It includes expenditure on economic services, social services, general services and plan assistance to states and union territories. Out of the total plan expenditure, expenditure on economic services takes the lion’s share. In the budget proposals of 2012-13 the size of plan expenditure of the Union Govt. stands at $8382 crore – 18% higher than 2011-12 budget.

Plan expenditure is again divided into plan expenditure on revenue account and plan expenditure on capital account. That part of plan expenditure which is incurred for meeting the current expenses but does not create any asset is called plan expenditure on revenue account. Expenditure on social services, economic services, plan assistance to states and union territories are included in this category. On the other hand, those plan expenditures which are incurred for creation of assets or capital are called plan expenditure on capital account.