Demonetisation had negative impact on India’s growth which slowed slowed down to 7.1 per cent in 2016-17, despite a very good showing by the agricultural sector. India also lost the tag of the fastest growing economy to China in the March quarter with a GDP growth of 6.1 per cent. The GDP, as per the new series with base year of 2011-12, had expanded by 8 per cent in 2015-16. It was 7.9 per cent as based on the old series.
According to the data released by the Central Statistics Office (CSO), the Gross Value Added (GVA) slipped sharply to 6.6 per cent in the last financial year ended March 31, from 7.9 per cent growth in 2015-16. The demonetisation seems to have impacted the GVA in the third as well as fourth quarter of 2016-17 which slipped to 6.7 per cent and 5.6 per cent respectively, from 7.3 per cent and 8.7 per cent.
Almost all sectors, with the exception of agriculture, showed deceleration in the aftermath of demonetisation. While the manufacturing sector output in the fourth quarter slowed to 5.3 per cent versus 12.7 per cent in the same period of last year, the construction sector slipped into the negative territory.
Thanks to good monsoon, the agricultural sector posted a huge jump in growth as it expanded by 4.9 per cent during 2016-17 compared to dismal growth of 0.7 per cent in the previous year.
In the fourth quarter itself, the agriculture sector GVA rose by 5.2 per cent as compared to 1.5 per cent in the same period of 2015-16. The data further said the per capita income during 2016-17 is estimated to have attained a level of Rs 1,03,219 as compared to the estimates for the year 2015-16 of Rs 94,130 showing a rise of 9.7 per cent.
Meanwhile, Chief Economic Advisor Arvind Subramanian told news agency ANI today: “Broadly the data is consistent with what we said in the monetary survey.”
(With inputs from PTI)