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Economic Uncertainty

Mains-GS3-Economic Development

The 15th Finance Commission’s committee on the fiscal consolidation road map has raised concerns over the Indian economy.


1. There are high levels of uncertainty about the course of the pandemic and the fiscal pressures on the economy as well as the trend of economic recovery.

2. India’s nominal GDP growth rate in 2020-21 could range between -6% and 1%.

3. Nominal GDP growth does not take inflation into account and so is higher than real GDP growth.

4. In the medium term, India’s growth should be in the range of 8% or else the debt trajectory will become very problematic.

5. There is a wide disparity between the per capita health personnel available in various States.

6. The anaesthetists needed to operate ventilators are missing in many rural areas even though the manufacture of the machines has increased.


1. There is an immediate need to raise the health infrastructure in areas with a cluster of positive patients.

2. There are growing needs of rural health infrastructure, especially with migrants returning from the cities.

3. Final year MBBS students should be allowed to begin practising in some areas and national health service is needed.

4. The government’s financial outlay on the health sector must increase significantly from the current 0.9% of GDP in the medium term.

About FFC

1. Finance Commission is a constitutional body and the core of fiscal federalism. It is set up under Article 280 of the Constitution.

2. Fifteenth Finance Commission was constituted in 2017 to give recommendations for devolution of taxes and other fiscal matters for five fiscal years from 2020.

3. Its core responsibility is to

a) Evaluate the state of finances of the Union and State Governments

b) Recommend the sharing of taxes between them

c) Lay down the principles determining the distribution of these taxes among States.

4. It is chaired by N. K. Singh.

Source- The Hindu