Definition
Plan vs Non-Plan Expenditure (Legacy)
Plan and non-plan expenditure was the former Budget classification of spending, since replaced by the revenue-capital split after the Planning Commission was wound up.
For decades, the Budget divided spending into plan expenditure, linked to schemes in the five-year plans, and non-plan expenditure, covering interest, salaries, subsidies and defence. This split blurred whether money was building assets or funding consumption.
With the Planning Commission replaced by NITI Aayog and five-year plans discontinued, the classification was dropped. The Budget now relies on the cleaner revenue versus capital expenditure distinction, which better reflects the quality of spending. Understanding the legacy terms helps in reading older Budget documents.
Related terms
- Revenue vs Capital ExpenditureRevenue expenditure covers the government's recurring running costs, while capital expenditure creates lasting assets or reduces liabilities.
- Capex PushA capex push is a deliberate budgetary strategy of sharply increasing government capital expenditure on infrastructure to spur growth and attract private investment.
- NITI AayogNITI Aayog is the government's policy think tank, which replaced the Planning Commission and advises on long-term strategy and cooperative federalism.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.