Centre: Can’t pinpoint impact of demonetisation on growth

New Delhi, March 21: The Centre on Tuesday said it is not possible to pinpoint the impact of demonetisation on GDP as economic growth is contingent on a number of factors.

“The economic growth of a country depends on a number of factors including structural, external, fiscal and monetary factors (which is partly reflected by demonetisation). Therefore it is not possible to pinpoint the impact of demonetisation on India’s GDP,” MoS (finance) Arjun Ram Meghwal said in a written reply to Rajya Sabha.

Mr Meghwal, however, added that as per the second advance estimates released by the Central Statistics Office(CSO) on February 28 based mostly on information for the first nine to ten months of 2016-17, the growth rate of GDP at constant market prices is estimated to be 7.1 per cent in 2016-17.

The CSO had projected the same growth rate in the first advance estimates released on January 6 based mostly on the information for the first seven to eight months of the current fiscal.

In an another development, Economic affairs secretary Shaktikanta Das said the government is focusing on printing and supplying of `500 and lower denomination notes to avoid accumulation of high value currency.

“The approach which is now being followed is greater focus on manufacturing and supply of `500 and other lower denomination notes so that you have more `500 notes. The apprehension is being expressed that `2,000 notes would again lead to accumulation, (but) that should not happen,” he said on Tuesday.

Explaining the reason for coming out with `2,000 notes soon after demonetisation, Mr Das said this was primarily to ensure faster remonetisation.

In an unrelated note, he said that the centre will come out with a roadmap in the next few weeks to further simplify the FDI approval process by abolishing the FIPB.

“The process of FDI approval is being simplified further by dismantling the FIPB and delegating the power to ministries or the regulators as the case may be. The necessary formal proposals will be considered by the government very shortly,” he said at an even here.

“The procedure which will be followed after dismantling FIPB will be announced. It’s a matter of few weeks,” he said. The online interface for FDI approval will continue for greater transparency and speed, he said.