GDP takes slight demonetisation hit

New Delhi: India’s GDP slowed to 7.0 per cent in October-December from 7.4 per cent the previous quarter, but retained the title of the world’s fastest-growing major economy. India’s growth was higher than China’s 6.8 per cent for the last three months of 2016 despite demonetisation. The Central Statistics Office also retained its growth forecast for 2016-17 at 7.1 per cent.

Surprisingly, the manufacturing sector grew by 8.3 per cent in October-December against 6.9 per cent in the previous quarter when there was no note ban.  The agriculture sector grew by 6 per cent in Q3 against 3.8 per cent in Q2. Many experts had warned that demonetisation of old currency of Rs 500 and Rs 1,000 on November 8 will hit the economy. The RBI and other agencies had lowered GDP projections arguing that the note ban would have short-term impact on the Indian economy.