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Question

Briefly explain the importance of public expenditure in the industrial development of developing countries.

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Solution

The importance of public expenditure in the industrial development is in following manner-
(i) By building economic overheads, e.g., roads, railways, irrigation, power, etc. and undertaking of social overheads such as hospitals, schools, etc. productive capacity of an economy is increased.
(ii) Public expenditure is helpful in promoting and developing the basic and key industries such as capital goods industries.


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