New Delhi: Finance Commission Chairman N.K. Singh on Thursday said that urban sector holds the key to double-digit growth of the country, even as he suggested cutting down government debt below 60 per cent from more than 70 per cent currently.
"There is no doubt that an important engine of growth for much faster development of this country will have to come from the urban sector," Singh said in the inaugural session of a high-level roundtable on "Fiscal relations across levels of government".
Singh said deliberation was required to understand what could be done beyond putting in more resources to make a significant difference on the pace and the quality of urbanisation, so that the urban sector genuinely becomes an important engine of growth.
"I have no doubt that this country has a quest to come as close as possible to the double-digit rate of growth. The urban sector really holds a great key for that," he said at the meeting jointly hosted by the Finance Commission, the World Bank, the Organisation for Economic Co-operation and Development (OECD) and the Asian Development Bank (ADB).
Citing the amended Fiscal Responsibility and Budget Management (FRBM) Act, Singh said the Central government should take appropriate steps to bring down the government debt below 60 per cent of the GDP by 2024-25 from more than 70 per cent currently.
The Central government debt is 48.9 per cent of the GDP for 2018-19 and is expected to be 47.3 per cent in 2019-20, as per the 2019-20 Budget. The outstanding liabilities of the state governments stood at 23.4 per cent of the states' GDP at end-March 2017, with a range of 46.3 per cent in Punjab and 15.1 per cent in Chhattisgarh.
"These developments have posed an important and challenging task for the Commission to arrive at a roadmap for the Commission's award period from 2020 to 2025," he said.Singh also urged the research teams to find ways to make the third-tier self sufficient unlike in the past when they were critically dependent on the devolutions made to them by the state governments. He urged the immediate constitution of State Finance Commissions.