EPFO APFC 2023 General Studies · Question 61 of 120

Correct — C, (c) The Fifteenth Finance Commission. The sentence in the stem is very nearly the Commission's own recommendation, printed in the health chapter of its report for 2021-22 to 2025-26: public health expenditure of the Union and the States together should be increased in a progressive manner to reach 2.5 per cent of GDP by 2025. The Fifteenth Finance Commission, chaired by N. K. Singh, is the body that submitted that report, and health was one of the areas on which it took a considered view rather than confining itself to the tax-devolution arithmetic that Finance Commissions are best known for. Its reasoning was that India's public spending on health had been stuck near one per cent of GDP for years, that this left households paying for most of their own care out of pocket, and that the Union and the States had to move together, since health is a State subject under Entry 6 of the State List and roughly two-thirds of public health spending is done by the States. Around that headline number the Commission built a package: States should raise health spending to more than 8 per cent of their own budgets by 2022; primary health care should absorb two-thirds of total public health expenditure by 2022; an All India Medical and Health Service should be constituted under Article 312; and a large block of health grants — ₹70,051 crore over the award period — should be routed through local governments so that the money lands on primary health infrastructure rather than on tertiary hospitals. What makes the question answerable without recalling the report is the word 'together'. A target that binds the Union and the States jointly, expressed as a share of GDP and pinned to a year, is the natural output of a constitutional body whose whole function is to divide resources between the two levels of government. A ministry committee can recommend what the Union should spend; only a Finance Commission is asked to speak for both.

• (a)The National Commission on Macroeconomics and Health, 2005 — This body did exist and it did argue for higher public spending on health, which is what makes it the most attractive wrong answer in the set. It was set up by the Ministry of Health and Family Welfare and reported in 2005, building the macroeconomic case that ill health is a drag on growth and that public investment in health pays for itself — a line of argument that follows the WHO's Commission on Macroeconomics and Health of 2001. But it is a ministry-appointed expert body reporting two decades before the target year, and the specific formulation the stem quotes — Union and States together, 2.5 per cent of GDP, by 2025 — is not its recommendation. That target entered Indian policy with the National Health Policy of 2017 and was reiterated, with the joint Union-State framing the stem uses, by the Fifteenth Finance Commission. Match the wording of the target to the body whose mandate covers both levels of government, not to the earliest body that ever asked for more health spending.
• (b)The Parliamentary Standing Committee on Health, 2022 — The Department-related Parliamentary Standing Committee on Health and Family Welfare is a Rajya Sabha committee that examines the health ministry's demands for grants every year, and it has repeatedly criticised the low level of public health spending. So a candidate who remembers only 'somebody in 2022 said health spending is too low' will find this plausible. But a standing committee scrutinises the Union government's own budget; it has no remit over what State governments spend, and the recommendation in the stem is explicitly about the Union and the States taken together, which is Finance Commission territory. Note also that these committees examine and report on the executive's proposals — they do not fix medium-term fiscal targets for the federation, which is what a target expressed as a share of GDP by a stated year amounts to.
• (d)The Kasturirangan Committee — The name belongs to K. Kasturirangan, the space scientist and former Chairman of ISRO, and the two committees he is remembered for chairing have nothing to do with health finance. The first was the High Level Working Group on the Western Ghats, which reported in 2013 and recommended that about 37 per cent of the Western Ghats be declared an ecologically sensitive area, revisiting the earlier Gadgil report. The second was the committee that drafted the National Education Policy, 2020. This is a pure name-recognition distractor: it works only on a candidate who recognises the name as important without attaching it to a subject. Fix committee names to their domains — Kasturirangan to the Western Ghats and to education, not to public health expenditure.

A Finance Commission is a constitutional body appointed by the President under Article 280 every fifth year, and its core task is to recommend how the net proceeds of Union taxes should be divided between the Union and the States, how that share should be distributed among the States, and what grants-in-aid should be paid to States out of the Consolidated Fund of India under Article 275. Article 280(3)(d) adds a residual clause — any other matter referred to the Commission by the President in the interests of sound finance — and it is through that clause, together with the terms of reference the Union government frames, that recent Commissions have ranged over sectoral policy. The Fifteenth Finance Commission, chaired by N. K. Singh, was constituted in 2017 and, after an interim report for 2020-21, gave its main report for the five years 2021-22 to 2025-26. It kept the States' share of the divisible pool at 41 per cent, using 2011 population along with an explicit demographic performance criterion to protect States that had controlled fertility. Health was treated as a sector in its own right, and the Commission set out a joint Union-State spending path towards 2.5 per cent of GDP by 2025, with health grants routed through local governments and a recommendation that health be shifted to the Concurrent List. Understanding the body explains the answer: a target that binds both levels of government is the characteristic output of the one institution designed to speak about both.

EPFO's polity and governance block leans on bodies, targets and the documents that carry them, because an Assistant Provident Fund Commissioner works inside exactly that machinery — a statutory organisation implementing a social security scheme financed and supervised across levels of government. The habit the question rewards is matching a recommendation to the mandate of the body that made it, rather than trying to recall which report contained which sentence. Most candidates cannot place the 2.5 per cent target in a specific document; almost all can reason that a target expressed for the Union and the States together, as a share of GDP, by a stated year, is the kind of thing only a Finance Commission is asked to produce, since a ministry committee speaks for the Union alone and a parliamentary standing committee scrutinises the Union's own demands for grants. The paper reinforces this by putting a genuinely well-known alternative in the set: the National Health Policy of 2017 also carries a 2.5 per cent target, and had it been an option this item would have been much harder. It is not, and the option that remains with authority over both levels of government is the answer. The stem is also a small reminder about the paper's typography — it prints the decimal as a raised middle dot, 2·5, which is this booklet's house style and not a misprint.

• The Fifteenth Finance Commission, chaired by N. K. Singh, gave its main report for 2021-22 to 2025-26 and recommended that public health expenditure of the Union and the States together be increased in a progressive manner to reach 2.5 per cent of GDP by 2025.
• Its other health recommendations included States raising health spending to more than 8 per cent of their own budgets by 2022, primary health care taking two-thirds of total public health expenditure by 2022, and an All India Medical and Health Service under Article 312.
• The Commission recommended health grants of ₹70,051 crore over 2021-26 routed through local governments, so that the money reaches primary health infrastructure, and suggested that health be moved to the Concurrent List.
• The same 2.5 per cent of GDP by 2025 target had been set earlier by the National Health Policy, 2017, which is why the number is familiar even to candidates who have never opened the Finance Commission's report.
• Finance Commissions are appointed by the President under Article 280 every fifth year; Article 280(3)(d) lets the President refer any other matter in the interests of sound finance, which is the route by which sectoral recommendations of this kind enter their reports.
• The Fifteenth Finance Commission kept the States' share of the divisible pool of Union taxes at 41 per cent, the reduction from the Fourteenth Commission's 42 per cent reflecting the conversion of Jammu and Kashmir into Union Territories.

• Attributing the 2.5 per cent of GDP by 2025 target only to the National Health Policy, 2017 and therefore rejecting the Finance Commission option; both carry the target, and the stem's Union-and-States-together framing points to the Commission
• Treating the National Commission on Macroeconomics and Health as the answer because it is the option that sounds most like a health-finance body; it is a ministry-appointed expert group that reported in 2005
• Confusing the Department-related Parliamentary Standing Committee on Health and Family Welfare, which scrutinises the Union health ministry's demands for grants, with a body that can set spending targets for the States
• Attaching the Kasturirangan name to the wrong subject; it belongs to the Western Ghats High Level Working Group of 2013 and to the drafting of the National Education Policy, 2020
• Assuming a Finance Commission only divides taxes; Article 280(3)(d) and the terms of reference let it recommend on sectors, local bodies, disaster financing and fiscal consolidation

Finance Commissions appear in this paper's polity and finance block in three recurring shapes: the constitutional provision that creates them and the matters they must report on, the specific numbers of the most recent Commission such as the 41 per cent vertical share and the criteria used for horizontal distribution, and — as here — a named recommendation that has to be attributed to the right body. Health and social security recommendations are favoured because they sit at the meeting point of the polity and the welfare-scheme syllabus that an APFC is expected to know. The reliable technique is to read the scope of the claim before reading the options: a claim covering both the Union and the States, expressed as a share of GDP with a deadline, narrows to a constitutional fiscal body almost automatically, and the other three options can then be eliminated on mandate alone rather than on recall.

No directly related past PYQ was found.

• practice — not a real PYQ

  The recommendation that an All India Medical and Health Service be constituted under Article 312 of the Constitution was made by which one of the following?

  • (a)The Fourteenth Finance Commission
  • (b)The Fifteenth Finance Commission
  • (c)The NITI Aayog Governing Council
  • (d)The National Human Rights Commission

  Answer(b) The Fifteenth Finance Commission — its health chapter recommended constituting an All India Medical and Health Service under Article 312, alongside the 2.5 per cent of GDP by 2025 spending path, the two-thirds share for primary health care and health grants routed through local governments. Article 312 allows Parliament, on a Rajya Sabha resolution supported by not less than two-thirds of the members present and voting, to create new all-India services common to the Union and the States.

• practice — not a real PYQ

  Under which Article of the Constitution is the Finance Commission constituted by the President, and at what interval?

  • (a)Article 263, every third year
  • (b)Article 275, every fourth year
  • (c)Article 280, every fifth year or earlier if the President considers it necessary
  • (d)Article 293, every sixth year

  Answer(c) Article 280, every fifth year or earlier if the President considers it necessary — Article 280 also lists the matters the Commission must report on, including the distribution of the net proceeds of taxes between the Union and the States, the principles governing grants-in-aid to States out of the Consolidated Fund of India under Article 275, and measures to augment State funds to supplement the resources of panchayats and municipalities. Article 263 concerns the Inter-State Council and Article 293 the borrowing powers of States.