Growth rate rebounds to 6.3% as GDP recovers

The data published by Central Statistics Office states that the Indian GDP has grown at a rate of 6.3% in the third quarter of the financial year 2017-18. Following which, it has slowed down to a three year low of 5.7% in the June quarter.

The manufacturing sector has grown by 7% along with mining output and electricity growing at the rate of 5.5% and 7.6% respectively. However, the agricultural sector witnessed a sharp decline from 2.3% to 1.7% in the growth rate.

 The eight core sectors (coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity) constitute 40.27% of the weight of items in the index of industrial production. These sectors have decelerated to 3.5%.

Private consumption declined to a lowly 6.5% whereas the investment demand growth increased up to 4.6%.

The economy reeling from the effects of demonetisation, wherein Rs 500 and Rs 1000 notes were withdrawn as official mode of payment, has not been able to show major signs of improvement.

Sources:

Livemint, The Hindu

Wealth in Health: Low public spending in healthcare sector

The Health Ministry after almost a decade released the National Health Accounts (NHA), and according to published document, India’s total healthcare expenditure comes to 4 per cent of Gross Domestic Product (GDP). Raising questions about the already pitiable state of public funding in the sector, this statistics hints at the need for immediate focus. In 2013-14, the data for which was released recently, the Total Healthcare Expenditure (THE) was Rs. 4.5 lakh crores, which totals to 4 per cent of the GDP. The earlier estimates were for the financial year 2004-05.

With a population of 1.21 billion, the government of India’s spending in health sector constitute just 1.15 per cent of GDP. Considering the figure, it has been argued time and again that government rise the spending on health to 2.5 per cent of GDP. Recognising this situation to be problematic, the Draft National Health Policy 2015, according The Hindu stated, “Global evidence on health spending shows that unless a country spends at least 5-6 per cent of its GDP on health and the major part of it is from government expenditure, basic health care needs are seldom met.”

The NHA data states, the low public spending on healthcare, Rs. 3.06 lakh crore came from households. Although there has been a marginal upgrading from 2004-05, when the share of government’s share was just 22 per cent, this figure is still challenging.

However, of the total money that flows in India’s healthcare system, according to the data released by the Ministry, preventive care in the country receives around 9.6 per cent. Adding to this “abysmally low” number, it has also been noted that, Indians spend eight times more on private hospitals than on government ones.

What is alarmingly in this situation is, Indians’ out-of-pocket (OOP) expenditure on healthcare has shot up. This means, money individuals pay on their own, instead of being covered by insurance or health benefits. About 73 per cent of contribution in the space of health finance, based on the data, is the money that individual households spend. And this, according to health economist Dr Sakthi Selvaraj, “is a huge concern”. “I cannot think of any other country, except Myanmar, where OOP is this huge,” he informed The Hindu.

While all eyes are on the initiatives the government takes to improve its contribution in the healthcare, member of NITI Aayog, Bibek Debroy, opined on the matter saying, “There is not much point in saying that government expenditure on health should be increased to 2.5 per cent of GDP, unless you also explain where those extra resources will come from.”

Now the question remains, how will the extra resources for healthcare be collected, to crease out the tension of flow of resources in India’s healthcare sector?

 

Sources: The Hindu

India GDP grows 7.3% in October-December quarter

India’s Gross Domestic Product (GDP) expanded by 7.3 per cent in the October-December quarter for the previous year, in line with market expectations. The Indian economy is expected to expand an annualised 7.6 per cent in the 2016 fiscal.

There was a slight uptick in growth in nominal terms, i.e. to 9.2 per cent in the third quarter led by an upward inflationary movement. This against 6.4 per cent in the previous quarter.

The growth in the gross domestic product was led by double digit expansion in the manufacturing and service sector segments. Manufacturing segment posted a growth of 12.6 per cent, the highest in the current fiscal, and is estimated to expand by 9.5 per cent in the current fiscal. This is a substantial improvement from 5.5 per cent in 2014-15.

Affected by drought, the agricultural segment posted a 0.1 per cent deflation in the quarter ending December.

The gross fixed capital formation, has seen a slight decline in the third quarter, falling to a 27.8 per cent as against 30.9% and 30.5% in the previous two quarters respectively.

The private consumption slipped marginally to 59.5 per cent, compared to 59.6 per cent in the previous quarter. Economists expect that the consumption will drive the growth in 2016-17 especially when the 7th pay commission wage proposals take effect.

SOURCES: FirstPostBusiness Standard