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  1. Development expenditure of the Central government does not include
    1. defence expenditure
    2. expenditure on economic services
    3. expenditure on social and community services
    4. grant to states
Correct Option: D

All expenditures that promote economic growth and development are termed as development expenditure. Expenditure on infrastructure development, public enterprises or development of agriculture increase productive capacity in the economy and bring income to the government. Expenditures in the nature of consumption such as Defence, interest payments, expenditure on law and order, public administration, do not create any productive asset which can bring income or returns to the government are non-development expenditure.



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