GDP sans demonitising affects
The government has released today the figures on Counry's GDP growth rate today without accounting for the affects of its post-demonetisation. The figures show that the current fiscal year's GDP growth rate is slowing down to 7.1 per cent from 7.6 per cent in fiscal 2015 -2016. The reason attributed for the slow down is attributed to slump in manufacturing, mining and construction sectors,
TCA Anant, Chief Statistician, Central Statistics Office (CSO) said the figures for November were available and examined but “it was felt in view of the policy of denotification of notes there is a high degree of volatility in theses figures and conscious decision was taken not make projections using the November figure”.
The ‘First Advance Estimates of National Income, 2016-17' also did not reflect the impact of demonetisation, effected on November 9 for old notes ban of Rs 500 and 1,000, and are based on sectoral data for only seven months or till October.
Real GDP at constant (2011-12) prices in the year 2016-17 is likely to attain a level of Rs 121.55 lakh crore, as against the Provisional Estimate of GDP for the year 2015-16 of Rs 113.50 lakh crore, released May 31, 2016.
The projections on national income are now in line with the Reserve Bank's estimates, which too has lowered the GDP growth prospects to 7.1 per cent.
According to the data, performance of agriculture, forestry, fishing and ‘public administration' were bettered.
On the other hand, mining and quarrying is likely to shrink by 1.8 per cent after recording a growth a 7.4 per cent in 2015-16. Growth in manufacturing is expected to slow to 7.4 per cent (from 9.3 per cent) and construction activities to 2.9 per cent (from 3.9 per cent).
As admitted by the CSO, a high degree of volatility in the figures clearly shows that if the adverse affects of demonitisation are factored honestly, the GDP figure may further slide and reflects a dismal picture. The government and RBI should, therefore, take appropriate measures to reign in any futher slow down when the country is passing through an unprecedented phase.