Demonetisation effect: India’s GDP growth slows to 7 percent in Q3 [Oct-Dec]

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Dr. T.C.A. Anant, Chief Statistician of India & Secretary to the ministry of statistics & programme implementation, addressing a press conference after the release of the data.

The Central Statistics Office on Tuesday pegged India’s growth rate at 7 per cent for the current fiscal, 7.3 per cent for fiscal year 2018 and 7.7 per cent for fiscal year 2019. In a statement today, the CSO said, “Agriculutre and allied sector growth estimated at 4.4 per cent in 2016-17, up from 0.8 per cent last fiscal. Advance GDP growth estimate for current fiscal pegged at 7.1 per cent, the same as projected earlier.


In a statement, the CSO said Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in 2016-17 is likely to attain a level of Rs 121.65 lakh crore, as against the first revised estimate of GDP for 2015-16 of Rs 113.58 lakh crore, released in January 2017.

Earlier in the day, the Reserve Bank of India (RBI) and the Economic Survey had projected India to grow at 6.9 per cent and 6.5 per cent in current fiscal, while the International Monetary Fund (IMF) had estimated it to be 6.6 per cent. Paris-based think tank OECD had today said, “India has been a star performer in gloomy times. We do not have many cases of 7 per cent growth… It is a top reformer among all the G-20 countries.”

The Central Statistics Office (CSO) has retained the growth projection for the current fiscal at 7.1 per cent, as projected in the first advance estimate in January. Meanwhile, the CSO has also marginally revised upwards the GDP estimates for the first and the second quarters to 7.2 per cent and 7.4 per cent.

It was feared that demonetisation effected in the middle of the third quarter (November 9, 2016) would have adverse bearing on various segments of the economy.

The Statistical Data:

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  • The growth in GDP during 2016-17 is estimated at 7.1 per cent as compared to the growth rate of 7.9 per cent in 2015-16.
  • Real GVA (Gross Value Added) is anticipated to increase from Rs 104.70 lakh crore in 2015-16 to Rs 111.68 lakh crore in 2016-17.
  • The second advance estimates of National Income, 2016-17, revealed that the growth in the GVA from ‘manufacturing’ sector is estimated to be 7.7 per cent compared to 10.6 per cent in 2015-16.
  • The per capita net national income (current price) during 2016-17 is estimated to be Rs 1,03,818 showing a rise of 10.2 per cent compared to Rs 94,178 during 2015-16 with the growth rate of 8.9 per cent.
  • Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 88.40 lakh crore in 2016-17 as against Rs 79.00 lakh crore in 2015-16. At constant (2011-12) prices, the PFCE is estimated at Rs 68.26 lakh crore in 2016-17 as against Rs 63.66 lakh crore in 2015-16.
  • In terms of GDP, the rates of PFCE at current and constant prices during 2016-17 are estimated at 58 per cent and 56.1 per cent, respectively, as against the corresponding rates of 57.8 per cent and 56.1 per cent, respectively in 2015-16.
  • The data further revealed that Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 40.97 lakh crore in 2016-17 as against Rs 39.89 lakh crore in last fiscal.
  • At constant prices, the GFCF is estimated at Rs 35.55 lakh crore in 2016-17 as against Rs 35.35 lakh crore year-on-year. The GFCF is expected to register growth rate of 2.7 per cent at current prices and 0.6 per cent at constant prices.
  • In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during 2016-17 are estimated at 26.9 per cent and 29.2 per cent, respectively, as against the corresponding rates of 29.2 per cent and 31.1 per cent, respectively in 2015-16.

Download the Second Advance Estimates of National Income, 2016-17 and quarterly estimate of GDP 3rd quarterpdf-2

(Source: MOSPI)

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