Govt pegs slowest growth in 3 years

Govt pegs slowest growth in 3 years

Demonetisation impact not assessed

Govt pegs slowest growth in 3 years

The government on Friday pegged India’s economic growth for 2016-17 at 7.1%, lower than last year’s 7.6%.

The projection did not include the impact of demonetisation, and was based only on seven months’ data points from April to October 2016.

This is the first advanced national income data released by the Central Statistical Office.

Economic growth is expected to slowdown further when the second advanced estimates are released on February 28, capturing the impact of the November 8 demonetisation.

According to the data, manufacturing is expected to slow down at 7.4% in the 2017 fiscal. Mining is expected to contract at 1.8%, as against a growth of 7.4% in fiscal 2016. Lower crude oil and natural gas production has dragged down the mining sector this year.

The agriculture sector, however, is expected to accelerate to 4.1% this fiscal, as compared with 1.2% in the 2016 financial year. Releasing the data, the country’s chief statistician said some figures for November were available.

Statisticians examined them, found a high degree of volatility because of denotification and took a conscious decision not to make a projection on the basis of the November figures.

Finance Minister Arun Jaitley had earlier said the post-demonetisation cash crunch could impact the economy for at least six months. But private economists are of the view that it could last longer.

The statisticians’ growth projection is in line with the RBI’s forecast of 7.1% for this fiscal.