Western Railway, Train derailment

Railway workers clean a coach at a railway yard in the old quarters of Delhi

Rail Budget's 92-year-old journey set to end

Plan outlay

Amit Mitra

Odisha pegs plan outlay at Rs 45,000 cr in FY 17

Yanamala Ramakrishnudu

Raman Singh (Photo: Official website of the Chhattisgarh CM)

<div>
	Plan expenditure forms a sizeable proportion of the total expenditure of the central government. The Demands for Grants of the various ministries show the Plan expenditure under each head separately from the Non-Plan expenditure. The Expenditure Budget also gives the total Plan provisions for each of the ministries arranged under the various heads of development and highlights the Budget provisions for the more important Plan programmes and schemes.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Statements showing externally aided projects under State and Central Plan are also included in the document. A description of important schemes included in the Plan along with the objectives, targets and achievements is given in the Outcome Budget of the respective ministries. Variations in the estimates of Plan expenditure are also explained.</div>
<div>
	&nbsp;</div>

RELATED BUDGET TERMS

Learn what is Plan outlay, Plan outlay Definition and more Plan outlay news here at Business Standard.

What is Plan outlay, News, Budget 2020 News, Plan outlay Definition

What is Plan outlay

<div>
	Article 113 of the Constitution mandates that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement and required to be voted by the Lok Sabha be submitted in the form of Demands for Grants. The Demands for Grants are presented to the Lok Sabha along with the Annual Financial Statement.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Generally, one Demand for Grant is presented in respect of each ministry or department. However, more than one demand may be presented for a ministry or department depending on the nature of expenditure. With regard to Union Territories without legislature, a separate demand is presented for each of the Union Territories. Each Demand first gives the totals of &#39;voted&#39; and &#39;charged&#39; expenditure as also the &#39;revenue&#39; and &#39;capital&#39; expenditure included in the demand separately, and also the grand total of the amount of expenditure for which the demand is presented.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	This is followed by the estimates of expenditure under different major heads of account. The breakup of the expenditure under each major head between &#39;Plan&#39; and &#39;Non-Plan&#39; is also given. The amounts of recoveries taken in reduction of expenditure in the accounts are also shown. A summary of Demands for Grants is given at the beginning of the Budget document, while details of &#39;New Service&#39; or &#39;New Instrument of Service&#39;, such as formation of a new company, undertaking or a new scheme, etc, if any, are indicated at the end of the document.</div>
<div>
	&nbsp;</div>
<div>
	Each demand normally includes the total provisions required for a service; that is, provisions on account of revenue expenditure, capital expenditure, grants to state and Union Territory governments, and also loans and advances relating to the service.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In cases where the provision for a service is entirely for expenditure charged on the Consolidated Fund of India, for example, interest payments (Demand for Grant No 35), a separate Appropriation, as distinct from a Demand, is presented for that expenditure and it is not required to be voted by the Lok Sabha. However, where expenditure on a service includes both &#39;voted&#39; and &#39;charged&#39; items of expenditure, the latter are also included in the demand presented for that service but the &#39;voted&#39; and &#39;charged&#39; provisions are shown separately in that demand.</div>
<div>
	&nbsp;</div>

Learn what is meant by Demand for Grants or Demand for Grants definition and more Demand for Grants news here at Business Standard.

What is Demand for Grants, Demand for Grants Meaning, Demand for Grants Definition

Demand for Grants

<div>
	The government&#39;s expenditure can be divided into two parts &mdash; plan and non-plan. Plan expenditure is that component of government expenses which helps increase the productive capacity in the economy. It includes outlays for different sectors, such as rural development and education.</div>
<div>
	&nbsp;</div>
<div>
	Unlike non-plan expenditure, which is mostly fixed and obligatory in nature, plan expenditure is part of Budget estimates determined after discussions with the ministries and stakeholders concerned.</div>

Learn what is Plan Expenditure, Plan Expenditure Definition and more Plan Expenditure news here at Business Standard.

What is Plan Expenditure, News, Budget 2020 News, Plan Expenditure Definition

Plan Expenditure

<div>
	The government&#39;s total spending can be divided into two broad sub-heads &mdash; plan and non-plan &mdash; with the latter constituting the bulk of expenditure.</div>
<div>
	&nbsp;</div>
<div>
	Non-plan expenditure is what the government spends on the so-called non-productive areas and is mostly obligatory in nature. It includes salaries, subsidies, loans and interest.</div>
<div>
	&nbsp;</div>
<div>
	Plan expenditure, on the other hand, pertains to the money set aside for productive purposes like various projects of ministries. It is spent on productive asset creation through Centrally-sponsored programmes and flagship schemes.</div>

Learn what is Non-Plan Expenditure, Non-Plan Expenditure Definition and more Non-Plan Expenditure news here at Business Standard.

What is Non-Plan Expenditure, News, Budget 2020 News, Non-Plan Expenditure Definition

Non-Plan Expenditure

<div>
	Capital expenditure is the money spent by the government on the development of machinery, equipment, building, health facilities, education, etc. It also includes the expenditure incurred on acquiring fixed assets like land and investment by the government that gives profits or dividend in future.</div>
<div>
	&nbsp;</div>
<div>
	<strong>Understanding capital expenditure</strong></div>
<div>
	&nbsp;</div>
<div>
	Capital spending is associated with investment or development spending, where expenditure has benefits extending years into the future. Capital expenditure includes money spent on the following:</div>
<ul>
	<li>
		Acquiring fixed and intangible assets</li>
	<li>
		Upgrading an existing asset</li>
	<li>
		Repairing an existing asset</li>
	<li>
		Repayment of loan</li>
</ul>
<div>
	<strong>Why is capital expenditure important?</strong></div>
<div>
	&nbsp;</div>
<div>
	Capital expenditure, which leads to the creation of assets are long-term in nature and allow the economy to generate revenue for many years by adding or improving production facilities and boosting operational efficiency. It also increases labour participation, takes stock of the economy and raises its capacity to produce more in future.</div>
<div>
	&nbsp;</div>
<div>
	Along with the creation of assets, repayment of loan is also capital expenditure, as it reduces liability.</div>
<div>
	&nbsp;</div>
<div>
	However, the government has to be cautious with the expenditure. In the financial year 2019-20, capital expenditure was 14.2 per cent of Budget Estimates. The government had to cut public spending sharply towards the end of the financial year in order that the deficit target could be met. Total expenditure fell by 0.3 percentage points in 2018-19 over 2017-18. This includes a 0.4 percentage point slash in revenue expenditure and 0.1 percentage point hike in capital expenditure.</div>
<div>
	&nbsp;</div>
<div>
	<strong>How is capital expenditure different from revenue expenditure?</strong></div>
<div>
	&nbsp;</div>
<div>
	Unlike capital expenditure, which creates assets for the future, revenue expenditure is one that neither creates assets nor reduces any liability of the government. Salaries of employees, interest payment on past debt, subsidies, pension, etc, fall under the category of revenue expenditure. It is recurring in nature.</div>
<div>
	&nbsp;</div>

Learn What is Capital Expenditure, its definition, Capital Expenditure, meaning and more budget related news here at Business Standard.

What is Capital Expenditure, Capital Expenditure Meaning, Budget News, Capital Expenditure Types

Capital Expenditure

<div>
	Central plan of the Union Budget is also called the annual plan. The five-year Plan is split into five annual parts and the government hopes to achieve the objectives of the five-year Plan using the central plan. The funding provided to the Central Plan by the Union government is known as Budget support. The extra-budgetary resources required for the Central Plan come from public enterprises.</div>
<div>
	&nbsp;</div>
<div>
	The Central Plan outlay goes to different sectors like energy, transport, social services, general economics services, communications, science and tech, rural development, irrigation, etc.</div>

Learn What is Central plan, Central plan  Definition, Central plan news and more here at Business Standard.

Plan outlay

What is Plan outlay

Latest Updates on Plan outlay

IRFC to remain post rail budget merger

Bengal plan outlay raised by 17%

Odisha pegs plan outlay at Rs 45,000 cr in FY 17

AP raises plan outlay in 2016-17 budget

Bengal presents vote-on-account with 17% state plan outlay rise

Chhattisgarh planning panel approves Rs 34,715-cr plan outlay