GDP, Fiscal Deficit - Current Affairs Questions and Answers

ANSWER: Both of the above

Explanation:
Union Cabinet on March 15, 2017 approved the National Health Policy 2017 aiming to increase public healthcare expenditure to 2.5 percent of GDP.

More than two-thirds of resources will be going towards primary healthcare.

The policy is aiming to reach healthcare to all parts of the country, specially the underserved and underprivileged.

The last national health policy was framed in 2002.

This policy guides a time-bound implementation framework with clear milestones and distinct deliverables to attain policy goals.

The policy works to raise public healthcare expenditure to 2.5% of the GDP from the current 1.4%.

Features of the National Health Policy

• Policy envisages larger package of assured comprehensive primary healthcare via Health and Wellness centres.
• This is an extensive package including care for NCDs, mental health, geriatric care, palliative and rehabilitative care services.
• It works to ensure availability of 2 beds for every 1000 persons to enable access within emergency.
• The policy aims to make healthcare accessible for all and offers financial protection, proposing free drugs, diagnostics and emergency as well as healthcare services in public medical hospitals.
• The policy also aims to raise life expectancy from 67.5 to 70 years by 2025.
• It also aims to establish regular tracking of disability adjusted life years or DALY index as a measure of burden of disease and trends through major categories by 2022.
• The reduction of total fertility rate to 2.1 at national and sub-national levels was aimed for by 2025.
• Another goal of this policy is to reduce mortality of children under 5 years of age to 23 per 1000 by 2025 and maternal mortality rate from current levels to 100 by 2020.
• The scheme also aims to reduce infant mortality rate to 28 by 2019 and reduce neo natal mortality to 16 and still birth rate to single digit by 2025.
• The policy aims to strengthen the regulatory environment and seeks putting in place systems for setting standards and ensuring healthcare quality.
• The policy also checks out reforms in the current existing regulatory systems for easing manufacturing of drugs and devices for promoting Make in India and reforming medical education.
• Policy advocates development of mid-level service providers, nurse practitioners, public health cadre to improve availability of required health human resource.

ANSWER: 7.3

Explanation:
Central Statistical Office on 30th Nov 2016 announced India’s GDP accelerated to 7.3 percent in the second quarter of 2016-2017. This is up from a provisional 7.1 percent expansion in Q1.

Gross Value Added rose to 7.1 percent.

GDP growth accelerated in the second quarter from 7.1 percent, but GVA growth slowed 7.3 percent in that period.

Both GDP and GVA growth were slower in this Q2 compared to 2015-2016’s Q2. The Q2 of 2015-2016 showed a GDP growth of 7.6 percent and GVA growth of 7.3 percent.

The agriculture sector maintained the overall growth by registering a 3.3 percent GVA growth rate in Q2 of this financial year in comparison with 2 percent in Q2 of 2015-16.

The manufacturing sector saw considerable slowdown as it registered GVA growth of 7.1 percent in Q2 of this financial year as against 9.2 percent in 2015-2016’s Q2.

The mining and quarrying sector growth fell by 1.5 percent in Q2 compared with the contraction of 0.4 percent in the first quarter and a growth of 5 percent in Q2 of 2015-16.

Sectors like manufacturing, electricity, mining, services and others show a fall in the September quarter because they are not supported by demand.

Except for agriculture, public administration and construction, drop in outputs across all sectors took place.

Gross fixed capital formation equalled 29 percent of GDP in this Q2 compared to 32.9 percent in the previous year’s Q2.

Government final consumption expenditure was 13 percent of GDP in this Q2 compared to 12.1 percent in the earlier year. GFCE grew 18.8 percent in this Q1 and 15.2 percent in this Q2.

Government’s Capital Expenditure (Plan and Non Plan) fell 12.81 percent to INR 129459 crore as against INR 143329 crore a year back.

What is GDP?

GDP: Monetary value of all finished goods and services produced in a country in a certain time period. It is generally calculated on annual basis; it can be computed on quarterly basis as well.

It is a broad measurement of nation’s overall economic activity.

GDP = Private consumption+ Public consumption+ Government outlays+ Investments + Exports - Imports.

Where, GDP = C + G + I + NX

• C = all private consumption, or consumer spending
• G = sum of government spending,
• I = sum of all the country's investment, including businesses capital expenditures and
• NX is the nation's total net exports, calculated as total exports minus total imports (NX = Exports - Imports).

ANSWER: 1.3-1.5

Explanation:
Ind-Ra lowered FY2017 CAD estimate to 1.3-1.5 percent from 1.2 percent due to lower remittances and software earnings in forth quarter for current fiscal. India’s CAD narrowed sharply to USD 0.3 billion/o/1 percent of GDP in Q4, FY2016 from USD 7.1 billion or 1.3 percent in Q3 on account of lower trade gap.

• For the 2015-2016 fiscal, CAD or the difference in the in and outflow of foreign exchange fell to 1.1 percent of the GDP
• Low CAD indicates stability on the external front. On the one hand, low crude prices and collapse in global prices of commodities have resulted in lower trade deficit
• Low oil prices have caused Middle East economies to suffer as well.
• Remittances on private transfers fell to USD 63.1 billion in 2015-2016

ANSWER: Fiscal Responsibility and Budget Management

Explanation:
Government has formed a 5 member committee under former revenue secretary NK Singh to review the working of the 12 year old FRBM Act and examine the fiscal deficit range instead of the fixed target. Other members of the committee include former finance secretary Sumit Bose, Chief Economic Advisor Arvind Subramanian, RBI Deputy Governor Urjit Patel and NIPFP Director Rathin Roy.

• Committee will submit report to the government by October 31, 2016
• Committee will examine the need and feasibility of a fiscal deficit range as the target in place of existing fixed numbers (percentage of GDP) as goal.
• The way forward is keeping in view the broad objective of fiscal consolidation and prudence and changes required in the context of fiscal consolidation and prudence.
• Instead of fixed numbers as fiscal deficit targets, it is far better to have fiscal deficit range as the target- this provides necessary policy space to the government to deal with dynamic situations.

ANSWER: 8%

Explanation:
Terming GDP calculation as an imprecise science, CII has pegged the economic growth of the country at 8 percent for the current fiscal, higher than 7.6% pegged by the RBI. GDP growth of 8 percent is expected in 2016-2017says CII President Naushad Forbes. The basis for this economic prediction includes strong macroeconomic fundamentals and good business sentiments as well as downward trend in interest rates. CII’s new president also highlighted the need for focusing on regulatory mechanisms.

ANSWER: INR 3.78 lakh crore

Explanation:
Central government has notched up fiscal deficit of INR 3.78 lakh crore totalling 68.1% of the full 2015-2016 fiscal target. This was during the period of the first 6 months (April to September), according to data released by the government. By September, government got revenue of INR 5.13 lakh crore which is 45% of FY16 estimate and total spending was pegged at INR 9.11 lakh crore or 51.2 percent. From the total spending, plan spending was estimated at INR 2.54 lakh crore and non plan at INR 6.57 lakh crore. Of the total revenues, GoI has received INR 144 lakh crore through non tax sources and a significant portions of tax revenues have been received during Q4.