New Delhi : Aimed at improving its expenditure management, the Finance Ministry is contemplating doing away with the distinction between ‘plan and non-plan’ expenditure by 2017-18 and replacing it with ‘capital and revenue’ spending, reports PTI.

At a meeting with his state counterparts, Union Finance Secretary Ratan Watal said the classification is losing its significance after abolishing the Planning Commission and states could also deliberate on the same. He said a committee headed by a Special Secretary level officer has been set up in the Finance Ministry to look into the transition.

In 2011, an expert panel headed by C Rangarajan had proposed that the distinction between plan and non-plan expenditure be abolished for both the Centre and the states. Also the Expenditure Management Commission, headed by Bimal Jalan, has recently suggested that all expenditure be classified as revenue and capital.

Watal said: “This classification will facilitate linking expenditure to outcome and better public expenditure management. Simplification of accounting heads and routing of heads of expenditure as revenue and capital could reflect the direction of public expenditure in a better way.

“We still have time left for the 12th Plan (2012-17) for which we will continue with this, but perhaps this (capital and revenue expenditure) is something which you could also look at the state level. This will give the right direction in simplification of accounts and also how we

focus on expenditure.”

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