Context:
‘Financial Stability Report, December 2024’ released
Financial Stability Report:
- Released by – Reserve Bank of India
- Published half-yearly, with contributions from all financial sector regulators.
- Presents the collective assessment of the Financial Stability and Development Council (FSDC) subcommittee on current and emerging risks to the Indian financial system.
Report Highlights:
- Resilient Indian Economy: GDP projected to grow at 6.6% in 2024-25.
- Growth driven by rural consumption revival, government spending, and services exports.
- Government Finance:
- Central government’s debt-to-GDP ratio expected to decrease from 62.7% (2020-21) to 56.8% by 2024-25.
- States’ outstanding liabilities projected to decline from 31% to 28.8% in the same period.
- Stable Financial System: Scheduled commercial banks (SCBs) show strong profitability, declining non-performing assets, and adequate capital and liquidity buffers.
FSDC:
- Non-statutory body set up by the Government in 2010 as the apex-level forum to monitor macroprudential supervision of the economy.
- Chairman: Union Finance Minister.
- Members: Heads of financial sector regulators (RBI, SEBI, PFRDA, IRDA & FMC), Finance Secretary, etc. Reconstituted in 2018 to include more members.
- Functions: Deals with financial stability, financial sector development, and inter-regulatory coordination.
Source: ET
Previous Year Question
With reference to ‘Financial Stability and Development Council’, consider the following statements:
1. It is an organ of NITI Aayog.
2. It is headed by the Union Finance Minister.
3. It monitors macroprudential supervision of the economy.
Which of the statements given above is/are correct?
[UPSC Civil Service Exam – 2016 Prelims]
(a) 1 and 2 only
(b) 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
Answer: (c)
Explanation:
FSDC was constituted by an Executive Order of the Union Government as a non-statutory apex body under the Ministry of Finance. It is not an organ of the NITI (National Institute of Transforming India) Aayog. Statement 1 is not correct.
