'Economy back on track despite demonetisation'

Senior Economic Advisor to the Government of India H A C Prasad said that despite street expectations that demonetisation would severely cripple the domestic economy, on the contrary, the latter has been quite buoyant.

Delivering the keynote at the two-day conference on International Tax organised by Bangalore Chamber and Industry and Commerce (BCIC) here on Friday, Prasad said that most economic sectors have done exceedingly well despite the contraction of money supply due to demonetisation.

“As per the second Advance Estimates (AE) provided by the Central Statistical Organisation (CSO), the Indian economy is estimated to register growth of 7.1% in 2016-17, when compared with the growth rate of 7.9% in 2015-16. Growth in the third quarter of 2016-17, works out to 7%, against 6.9% in the same period previous year,” he said.

He further added: “For 2016-17, full-year 7.1% growth is expected, which is remarkable given the weak and unsettled global economy and all the dark clouds hovering over the demonetisation effect. Thus the Indian economy is one bright spot in the global landscape becoming one of the fastest growing big emerging market economies in the world despite global headwinds.”

He stated that the estimate for the GDP had not completely included the informal sector and therefore this number could change. However, the significant growth in the agricultural sector to 4.4%, and the fact that the petroleum/oil industry was not impacted in a significant manner.