India’s GDP Slow Down To 7.1% In FY17, Takes Demonetisation Hit
India's growth slowed down to 7.1 per cent in 2016-17, taking a hit of demonetisation, despite good show by the agricultural sector. According to the data released by the Central Statistics Office (CSO), the Gross Value Added (GVA) fell sharply to 6.6 per cent in FY 17 ended March 31, from 7.9 per cent growth in FY16.
The fourth quarter growth was also estimated at a mere 6.1 per cent. The 7.1 per cent figure is the lowest in three years and the revision of the base year for Index of Industrial Production (IIP) and Wholesale Price Index (WPI) failed to boost the economic growth.
Evaluating the impact of demonetisation, the GVA was affected in the third and fourth quarter of FY17 respectively. It came down from 7.3 per cent and 8.7 per cent to 6.7 per cent and 5.6 percent in the third and fourth quarter of FY17.
Agriculture managed to put up a good show amongst all the sectors and rose from the miserable growth performance of 0.7 per cent in FY16 and expanded by 4.9 per cent in FY17. In the fourth quarter itself, the GVA for the agriculture sector in FY17 increased by 5.2 per cent in comparison to 1.5 per cent in the same period last year.
Taking stock of the other sectors, construction went into negative territory (-3.7%) for the fourth quarter of FY17, compared to 6 per cent last year quarter. Similarly, manufacturing showed major slowdown with only 5.3% growth rate as compared to 12.7% in Q4 FY16, while financial, real estate and professional services grew by a mere 2.2 per cent.
Releasing the data, Chief Statistician of India and Secretary, MOSPI, Dr Anant said that it is not so straightforward to link the quarter results with demonitisation and long-term data is required to access the impact.
The data further adds that 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.
