The sentence talks about the bifurcation (or classification) of the budget into two parts (plan and non-plan funds) as being purely artificial. It then goes on to describe that the classification is still useful (merit), because it allows us to describe development expenses as different from consumption. Thus the correct sequence is as follows:

The bifurcation of plan and non-plan funds\ in the budget is artificial\ but there is some merit in it\ in so far as it focuses attention on development expenses\ as distinct from consumption.

And the correct arrangement will be (C), (E), (A), (D), (B).