Niti: New fiscal to make up loss

Q3 and Q4 were affected from crunch

New Delhi, Jan. 3: Niti Aayog vice-chairman Arvind Panagariya on Tuesday said demonetisation would have some impact on the economy in the third and fourth quarter of this fiscal but the country would make up for those losses in FY 2017-18.

“In the quarter in which the demonetisation decision was made and possibly even the quarter that follows which will be the last quarter of the fiscal 2016-17, we might see some decline in the growth rate,” Mr Panagariya told to a news channel

“...the impact is going to be small and subsequently as we get into the next fiscal 2017-18, we would make up for what we lose in these two quarters,” he said.

Asked whether the government is contemplating of providing big stimulus post-demonetisation, Mr Panagariya said it is too early to jump on any conclusion and one must wait to see the economic impact of demonetisation.

“So whether or not we need a stimulus etc. The answer to that question will depend on what we observe,” the Niti Aayog vice-chairman noted.

Mr Panagariya further said that some room for increased expenditure may nevertheless come from higher revenues and that is generally a good news.

Asked whether the government should stick to its roadmap for fiscal consolidation, Mr Panagariya said if there is no compelling reason then the Centre should simply stay course with the plan.

Referring to Niti Aayog’s recommendations of listing some unlisted public sector units, the Niti Aayog vice-chairman said there is a decision underway on listing a large number of public sector units.