Fiscal Discipline

Q.  Which of the following is/are true?

1) Plan / Non-Plan classification to be done away with from 2016-17 i.e. the current year.
2) Every  new  scheme  sanctioned  will  have  a  sunset  date  and  outcome review.
- Published on 21 Mar 16

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2

ANSWER: Only 2
 
  • Successive committees have questioned the merit in having Plan and Non-Plan classification of Government expenditure.
  • A broad understanding over the years has been that Plan expenditures are good and Non-Plan expenditures are bad.
  • This results in skewed allocations in the Budget. There is need to give greater focus to Revenue and Capital classification of Government expenditure.
  • Therefore, decided that the Plan-Non-Plan classification will be done away with from fiscal 2017-18.
  • To improve the quality of Government expenditure, every new scheme being sanctioned by Government will have a sunset date and outcome review.

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