After releasing the estimates for the country's economic growth
in 2016-17, Chief Statistician TCA Anant
on Friday clarified that the expectations do not take into account the impact of demonetisation
of high-value currency notes, announced in November. The estimates are based on the first seven months of the financial year (up to October).
The second estimates and the GDP
growth numbers for the third quarter would be revealed on February 28.
The government has estimated the country's economic growth
rate to slow down to 7.1 per cent in the current financial year, compared with 7.6 per cent in 2015-16.
Asked if there would be major changes in the actual data, Anant said, "It is unlikely that there would be major changes. We are carefully monitoring the data and using it methodically."
On the question of the note ban impact, Anant said, "I won't be speculative in revising the estimate."
The economists have predicted a 6.8% growth rate for Q3 factoring the note ban impact.
Former chief statistician Pronab Sen
said the growth is pretty much on par. "Full effect of demonetisation
has not been factored in. The May numbers can be lower as December numbers are not in," Sen said.
Montek Singh Ahluwalia, former deputy chairman of Planning Commission:
The country had an underlying strength for growth of over 7%, but demonetisation
has disrupted that strength and I think GDP
will get affected between 1 and 2 per cent. So now it should be 5 to 5.5 per cent for the current year.
He said the present government did not set any road-map for the long-term benefits out of note recall despite recognising the short-term pain. However, the immediate concern of the government should be to get back to 7 per cent-plus growth rate.
"We have to wait till the Economic Survey is placed by the government to get a clear picture on long-term benefits the government expects," he said.
Dharmakirti Joshi, Chief Economist, Crisil: With this kind of growth, I think, the central bank might hold off on rate cuts.
As far as the impact (of demonetisation) is concerned, we are, in our assumptions, taking into account adverse impact till the last quarter of this (financial) year, which is til March. After that it should stabilise.
Aneesh Srivastava, Chief investment officer at IDBI Federal Life Insurance Co: I am very worried with the projected growth rate. The methodology followed excludes demonetisation, but still the projected rate of 7.1 per cent is below my estimate of 7.5 per cent.
into account, the rate will substantially drop. My estimates taking demonetisation
into account was 6.8 per cent, but now it will much lesser than that.
Since the dollar is strengthening and global dynamics are not in our favour, I expect RBI to cut rate by 25 bps as early as February.
Varun Khandelwal, Managing Director at Bullero Capital:
Based on statistical measures, it is very difficult to factor in the impact on demonetisation. Mostly the impact of demonetisation
will be proportionally higher in micro, smaller and medium scale enterprises.
For FY17 our growth estimate range is lower at 5.5-6.5 per cent and this will depend on the future course of policy actions, the time taken for cash to come back into the system and what kind of budget we have.
Anjali Verma, Economist at PhillipCapital India:
This is the advanced estimate and we don't know if they are in any way incorporating the demonetisation
impact. We have a range of 6.5-7 per cent for FY17 and we will stick with that.
We are expecting that all-in-all growth will stay impacted for the next two-three quarters.
I think RBI should be following the inflation guidance that they have given and as when inflation is in comfortable zone they should go ahead and reduce rates. Lower lending rates would not means that RBI will stay away from reducing rates further.
Sunil Kumar Sinha, Director of Pulic Finance and Principal Economist, Indian Rating and Research: Perhaps data available with CSO (central statistical organisation) at this time, which can actually capture impact of demonetisation, is very limited.
I feel there is very limited scope for RBI interest rate cuts, even in February.
If banks are now cutting their lending or deposit rates, it is something which one would have expected to happen earlier.
There is still room for banks to lower interest rate given quantum reduction in policy rate.