Types of Non Development Expenditures

Types of Non Development Expenditures

1.    Defense Expenditure

Defense expenditure is one of the biggest non development expenditure for many developed and developing countries. Many unresolved territorial dispute is main reason of defense expenditure.

2.    Debt Servicing

Debt servicing is also major non development expenditure especially in developing countries. There are two types of debt servicing i.e. Domestic & international debt. Government takes debt to finance the deficit budget and then each year those debts are repaid.

3.    Administrative Expenditure

Administrative expenditure for running the government is also form a major portion of non development expenditure. There are number of department and ministries working both on federal and provincial level.

4.    Subsidies

Government provides subsidies on different items to share the burden of the poor class. Example of major subsidies included subsidy on electricity etc. different kind of subsidies is provided to agriculture sectors.

5.    Government Grants

Government grant is another reason for public expenditure. Government gives grants to different provincial government and welfare organization. Government also gives international grant to poor countries.