India’s GDP fastest at 7%

No negative impact of demonetisation in third quarter

Despite demonetisation, India’s GDP grew by 7 per cent between October and December 2016 (third quarter 2016-17) to retain the title of the world’s fastest-growing economy, according to the government on Tuesday.

India had grown by 7.4 percent in the previous quarter July-September 2016. Central Statistics Office has retained the growth forecast for 2016-17 at 7.1 per cent.

Surprisingly, the manufacturing sector grew between October and December 2016 (Q3) by 8.3 percent against 6.9 percent in the previous quarter of July-September 2016 (Q2) when there was no note ban.

Agriculture sector grew by 6 percent in Q3 against 3.8 per cent in Q2.

Experts had warned that demonetisation will hit the economy hard.

The RBI and other agencies like IMF and OECD had lowered the GDP projections arguing that the note ban would have a short-term impact on the Indian economy.

The finance ministry said the 7 per cent growth has negated negative projections about the impact of demonetisation.

“We had said that most of the reports were anecdotal and not based on statistics. There were reports that manufacturing activities in many sectors were affected due to demonetisation but as we see from the numbers manufacturing growth at very 8.3 per cent is very satisfying number and promising number,” said economic affairs secretary Shaktikanta Das.

The numbers completely negate the kind of negative projections and speculations made about the impact of demonetisation. — SHAKTIKANTA DAS Economic affairs secretary

New Delhi, Feb. 28: India's fiscal deficit in the first 10 months to January was `5.64 trillion ($84.56 billion) or 105.7 percent of the budgeted target for the fiscal year ending in March 2017, government data showed on Tuesday.

The fiscal deficit was 95.8 per cent of the fullyear target during the same period a year ago.

Net tax receipts in the first 10 months of 2016/17 fiscal year were `8.16 trillion, the data showed.

The government’s tax receipts usually rise in the last two months of the fiscal year than its spending, thereby helping it meet the budgeted full-year fiscal deficit target.

The government reiterated earlier this month that it would meet the 2016/17 fiscal deficit target of 3.5 per cent of gross domestic product, and had also set the next fiscal year’s target at 3.2 per cent of GDP.