The nationwide lockdown, in wake Covid-19 outbreak, is probably going to limit India's GDP growth to -6 per cent to 1 per cent within the fiscal year 2020-21, NK Singh, chairman of the 15th Finance Commission has said.
NK Singh, who called a gathering on Thursday to debate the fiscal consolidation roadmap of the central and state governments, told media that the important picture of India's fiscal health are going to be assessed only after fourth quarter and half-moon reports are out. However, he said, that experts have predicted that India's GDP growth will take a considerable hit.
"There may be a lot of uncertainty. we'll need to check out growth data for the fourth and first quarters to form an assessment of medium-term fiscal path," NK Singh told reporters.
He added, that India’s GDP growth is predicted to be between -6 per cent and 1 per cent this fiscal year consistent with experts. A negative rate of growth means the economy will shrink in size.
The entire nation has been under lockdown since Annunciation putting both state and central economies struggling . the govt is facing various challenges at the instant , including high rates of borrowing.
The states are getting to borrow up to five per cent in 2020-21. The states will use this money to fight the Corona battle. The Centre too will see its borrowings increase by almost 52 per cent. Investors expect the Federal Reserve Bank of India to still buy government debt to scale back pressure on the market.
India had used a fiscal escape clause to widen last year’s fiscal deficit to three .8 per cent of GDP and had targeted it at 3.5 per cent this year, and at 3.3 per cent and three .1 per cent over subsequent two years. The 15th Finance Commission is functioning on the fiscal consolidation road map at a consolidated level till the financial year 2026.
Speaking on healthy infrastructure, NK Singh said, "The expenditure on health sector will got to be significantly ramped up within the coming months as both states and Centre got to be prepared to fight novel coronavirus."
The Centre had announced a Rs 20-lakh crore package to spice up the economy. The fiscal impact of the package has been assessed to be around 1 per cent of gross domestic product. Analysts expect the govt to boost its spending later if the virus continues to further cramp economic activities.