Correct Option: C

Interest payments are the single largest item of expenditure. As per the Economic Survey 2011-2012, Interest payments constituted 3 per cent of India’s GDP in 2011-12. Major subsidies constituted 1.5 per cent, while defense expenditure comprised 1.1 per cent of India’s GDP in 2011-12. Of the revenue expenditure in 2011-12, interest payments comprised 24.4 per cent; Major subsidies: 12.3 per cent and Defence expenditure: 8.7 per cent.