Government says GDP will drop to 7.1% in 2016-2017 from 7.6% in 2015-2016
If the estimates prove to be true, it will be the slowest pace of expansion in the past three years.
The country’s Gross Domestic Product is expected to grow at 7.1% till March this year, the Central Statistics Office said on Friday. For the financial year 2015-2016, the economy grew at 7.6%. If the government’s predictions prove to be true, this year’s will be the slowest pace of growth in the past three years.
However, the impact of demonetisation has not been considered in the forecast. “We have decided not to include bank deposits data for November in FY17 GDP estimates,” chief statistician TCA Anant told Economic Times. Analysts said the impact of the note ban might stretch to the next financial year. Anant said the slowdown had been predicted because of poor performance of the industrial, manufacturing and construction sectors.
The estimated growth of real gross value added, which excludes taxes and subsidies, in 2016-2017 is 7%, a little less that 7.2% in 2015-2016, reported PTI. The real GDP at constant prices in 2016-2017 is likely to reach Rs 121.55 lakh crore, while the provisional estimate of GDP for the year 2015-2016 was Rs 113.50 lakh crore.
So far, the economy grew at a rate of 7.1% and 7.3% in the first and second quarters of the year. This year, the Central Statistics Office released its advance estimates earlier, keeping in mind the presentation of the Union Budget on February 1. Usually, it releases its forecast in February.
Economic Affairs Secretary Shaktikanta Das said the figures about the impact of the note ban are “mostly anecdotal and based on anecdotal evidence”. “Being a statistical organisation, the Central Statistics Office has to go on real statistics and we cannot expect them to go on the basis of impressions and anecdotal evidence,” he added.
The economic affairs secretary, however, said tax revenues would exceed budget estimates this year. “The economic survey and the budget will spell out what approach the government will take, so I would not like to pre-judge.”