While the government’s tax collections are likely to be severely affected due to the pandemic, the impact would be asymmetric, noted members of the advisory council to the 15th Finance Commission (FC), during their meeting with the FC over Thursday and Friday.
The discussions covered issues relating to the fiscal deficit and general government debt and the constraints in drawing up a path for consolidation of public debt post the pandemic.
The council highlighted that the government was faced with a substantial expenditure burden towards the healthcare sector and on support to the poor and other economic agents.
Members of the council were appreciative of the scale of the task the NK Singh-led commission had in designing the fiscal transfers over the next five years amid massive uncertainty in the future.
This online conference marked the second set of meetings the FC had with its advisory council since the lockdown was announced, according to the release. The last such meeting was on April 24.
The advisory council included Sajjid Z Chinoy, chief economist at JP Morgan, Prachi Mishra, chief India economist at Goldman Sachs, Neelkanth Mishra, India strategist at Credit Suisse, economist Omkar Goswami, Arvind Virmani, former chief economic adviser, DK Srivastava, 13th FC member and Sudipto Mudle and Govinda Rao, both 14th FC members.
On a special invite, this round of meetings was also attended by Pronab Sen, former chief statistician of India, Shankar Acharya, former chief economic adviser, and Rathin Roy, director of the National Institute of Public Finance and Policy.
Ministry of Rural Development (MoRD)
The Minister for Rural Development, Narendra Singh Tomar, pegged the MoRD’s budgetary requirements at Rs 82,946 crore over the five-year period from the current fiscal to FY26, in a separate meeting with the FC on Friday, according to a release.
In its report for FY21 released in November last year, the commission had placed special emphasis on the Pradhan Mantri Gram Sadak Yojana (PMGSY) due to its catalytic role in furthering rural development.
Updating the FC on the progress of the PMGSY, the MoRD said 550,528 km of roads have been constructed since the scheme was started in 2000, connecting 89% of eligible habitations.
The ministry put the cost of connecting the remaining 45,614 habitations at Rs 1.3 lakh crore.
Source: indiatimes.com