The Hindu

Fi­nance panel flags re­cov­ery un­cer­tainty

Mem­bers of the Com­mit­tee have wide vari­a­tions of opin­ion in nom­i­nal GDP growth pro­jec­tions

- Spe­cial Cor­re­spon­dent Finance · Business · India · Finance Commission of India · United States of America · All India Institute of Medical Sciences · Bihar · Jharkhand · Randeep Guleria

In­dia’s nom­i­nal GDP growth rate in 2020-21 could range be­tween -6% and 1%, ac­cord­ing to mem­bers of the 15th Fi­nance Com­mis­sion’s com­mit­tee on the fis­cal con­sol­i­da­tion road map, which had a video­con­fer­ence on Thurs­day.

“There are high lev­els of un­cer­tainty, both with re­gard to the course of the pan­demic and the fis­cal pres­sures on the econ­omy and the trend of eco­nomic re­cov­ery,” the Com­mis­sion’s Chair­man, N.K. Singh, told pressper­sons af­ter the meet­ing. He said par­tic­i­pants in the meet­ing had wide vari­a­tions of opin­ion in terms of nom­i­nal GDP growth pro­jec­tions, rang­ing be­tween -6% and 1%, as well as on whether the econ­omy would ex­pe­ri­ence a V-shaped or Ushaped re­cov­ery.

Nom­i­nal GDP growth does not take in­fla­tion into ac­count, and is thus higher than real GDP growth.

“In the medium term, we would like to be in the range of 8% growth, or the debt tra­jec­tory be­comes very prob­lem­atic,” said Dr. Singh, who felt that the Cen­tre’s re­forms as part of the Aat­manirb­har stim­u­lus pack­age were meant to spur such growth in the medium term, even if they did not help im­me­di­ately. “The ques­tion is what is the lag with which these re­forms are go­ing to re­flect in the growth rate in the medium term,” he said.

He also en­dorsed the Cen­tre’s re­form con­di­tions to al­low the States to ex­ceed their cur­rent bor­row­ing lim­its, though sev­eral States have ob­jected to this.

The Com­mis­sion’s high-level group on health, headed by AIIMS Di­rec­tor Ran­deep Gu­le­ria, also met on Thurs­day, to re­view its ear­lier rec­om­men­da­tions in view of the COVID-19 pan­demic. It has now rec­om­mended an im­me­di­ate beef­ing up of health in­fra­struc­ture in ar­eas with a clus­ter of pos­i­tive pa­tients, and dis­cussed the grow­ing needs of ru­ral health in­fra­struc­ture, es­pe­cially with mi­grants re­turn­ing from the cities, of­ten car­ry­ing the virus.

“There is a wide dis­par­ity be­tween the per capita health per­son­nel avail­able in var­i­ous States. The sit­u­a­tion in ru­ral Bi­har and Jhark­hand is dra­mat­i­cally dif­fer­ent from the cities,” Dr. Singh said. The anaes­thetists needed to op­er­ate ven­ti­la­tors are cru­cially miss­ing in many ru­ral ar­eas, he noted, even while man­u­fac­ture of the ma­chines has in­creased. There were also dis­cus­sions about al­low­ing fi­nal year MBBS stu­dents to be­gin prac­tis­ing in some ar­eas and the need for a na­tional health ser­vice.

In the medium term, the gov­ern­ment’s fi­nan­cial out­lay on the health sec­tor must in­crease sig­nif­i­cantly from the cur­rent 0.9% of GDP, said Dr. Singh.

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N.K. Singh

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