GDP growth slows to 7.1% in FY17; demonetisation not factored
The 'First Advance Estimates of National Income, 2016-17' did not reflect the impact of demonetisation, effected on November 9 for ban of old Rs 500/1,000 notes, and are based on sectoral data for only seven months or till October.
New Delhi: Country's GDP growth is estimated to slow down to 7.1 percent in current fiscal, from 7.6 percent in 2015-16, mainly due to slump in manufacturing, mining and construction sectors, the government data showed today without factoring in 'volatile' post-demonetisation figures.
Releasing the data compiled by the Central Statistics Office (CSO), Chief Statistician T C A Anant 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 projection using the November figure".
Accordingly, the 'First Advance Estimates of National Income, 2016-17' did not reflect the impact of demonetisation, effected on November 9 for ban of old Rs 500/1,000 notes, and are based on sectoral data for only seven months or till October.
Real GDP or Gross Domestic Product (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 growth in GDP during 2016-17 is estimated at 7.1 percent as compared to the growth rate of 7.6 percent in 2015- 16," the CSO said.
The CSO 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 percent.
"Anticipated growth of real GVA at basic prices in 2016-17 is 7 percent against 7.2 percent in 2015-16," the CSO said.
In value terms, the Gross Value Added (GVA) at constant prices is anticipated to increase from Rs 104.27 lakh crore in 2015-16 to Rs 111.53 lakh crore in 2016-17.
As per the data, performance of the all sectors, excluding 'agriculture' and 'public administration, defence and other services'.
'Agriculture, forestry and fishing' is expected to expand by 4.1 percent in 2016-17 from 1.2 percent.
On the other hand, mining and quarrying is likely to shrink by 1.8 percent after recording a growth a 7.4 percent in 2015-16.
Growth in manufacturing is expected to slow to 7.4 percent (from 9.3 percent) and construction activities to 2.9 percent (from 3.9 percent).
As per the data, the per capita net national income (current prices) during 2016-17 is estimated to be Rs 1,03,007 showing a rise of 10.4 percent as compared to Rs 93,293 during 2015-16 with the growth rate of 7.4 percent.
The budget can be said to hide more than it reveals. It is framed assuming business as usual – something that is not true post November 2016. This is a fatal mistake.
The survey is candid in pointing out that there will be a slowdown in growth this year too which will be between 25 to 50 bps lower than their baseline projection of 7%
Union Budget 2017-18 reflects a clear choice to stay on the same path even amid the additional difficulties caused by demonetisation – and therefore, promises little relief