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Govt spending in FY21 much less than projected, will not spur demand: CMIE
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According to CMIE, the big numbers of 2020-21 were used largely to regularise government books of accounts and partly to provide relief and not to revive the economy.
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“If this is the case as it seems to be so, this is, in reality, not an expenditure of 2020-21 but a settlement of past dues of the government. It increases government borrowing but it does not increase spending in a sense that could spur demand,” CMIE added.
The government s estimated increase in spending for 2020-21 may be only 17.3% and not 28.4% as projected by the government and will not spur demand, the Centre for Monitoring Indian Economy said.
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