Which of the following items does not fall under the development expenditure of the government in India?

Introduction / Context:
Public finance in India often classifies government expenditure into development and non development expenditure. Development expenditure is associated with creating social and economic infrastructure and improving welfare, while non development expenditure includes items that do not directly add to productive capacity or welfare but are still necessary. This question asks you to identify which item is not considered development expenditure, an important distinction that appears frequently in Indian economy questions.

Given Data / Assumptions:
- Options include expenditure on economic services, expenditure on social services, grants to states and defence expenditure.
- We must pick the item that is not part of development expenditure.
- We use conventional classifications used in Indian public finance discussions.

Concept / Approach:
Development expenditure generally includes spending on economic services (like agriculture, industry, transport), social services (like education, health, housing) and grants that support such programmes. These expenditures promote growth, productivity and social welfare. Non development expenditure typically includes defence, interest payments, pensions and administrative expenses. Defence expenditure, while essential for security, is usually not treated as development expenditure because it does not directly create productive assets or social services in the standard classification, even though it has indirect benefits.

Step-by-Step Solution:
Step 1: Identify which of the given options normally contribute to development in a direct way. Step 2: Expenditure on economic services is a classic example of development expenditure because it improves infrastructure, productivity and growth. Step 3: Expenditure on social services is also part of development expenditure because it raises human capital, health and education levels. Step 4: Grants to states can support state level development programmes, so they are normally counted as development expenditure when used for such purposes. Step 5: Defence expenditure, although important for national security, is conventionally classified as non development expenditure. Step 6: Therefore defence expenditure is the item that does not count as development expenditure.

Verification / Alternative check:
Standard textbooks on Indian public finance and economic surveys categorise defence spending under non plan or non development expenditure. In contrast, spending on roads, irrigation, power, schools and hospitals is clearly counted as development expenditure. Grants to states that finance such projects also fall under the development category. This consistent treatment across policy documents and teaching material confirms that defence expenditure stands out as the non development item in the list.

Why Other Options Are Wrong:
Expenditure on economic services is wrong as the answer because it directly creates productive capacity and is central to development expenditure.
Expenditure on social services is wrong because these services improve quality of life and human capital, and are classic components of development spending.
Grant to states is wrong because such grants often finance state level development projects and are typically recorded as development expenditure when used for those purposes.

Common Pitfalls:
Some learners assume that any large or important expenditure must be developmental. However, classifications are based on whether spending directly promotes growth and welfare in a measurable way. Defence, interest payments and pensions, although essential, are usually grouped as non development expenditure. Another pitfall is to think that grants to states are purely administrative transfers, but in the context of planning and federal finance, many grants are explicitly development oriented. Keeping these standard categories in mind helps avoid confusion in similar questions.

Final Answer:
The item that does not count as development expenditure is defence expenditure.