Gauging note ban hit a complex task: Anant

How a particular policy affects the figure is a complex task, says T C A Anant Chief Statistician

The government has refused to state demonetisation as a primary reason for gross domestic product (GDP) growth falling to a four-quarter low of 6.1 per cent in January-March of 2016-17.

Chief Statistician T C A Anant said at a press conference the effects of policies such as demonetisation cannot be concretely tied to one figure and the economy was still dynamic. “Disentangling from a web of policies, (arriving at) how a particular policy affects the figure is a complex task,” Anant said. Also, finding the exact effect of demonetisation on the economy's growth might not be possible in the near future.

The time series data from earlier years was crucial to find out the impact of demonetisation, Anant said, but calculating any back-series for GDP would be a very complex task.

The rate of capital formation has remained below 30 per cent in 2016-17. Anant said this figure has to be much higher to significantly set into motion long-term investment growth.

Along with GDP figures for 2016-17, the government has also revised GDP growth data for earlier years to factor in the new series of the Index of Industrial Production and the Wholesale Price Index. Accordingly, GDP grew by 7.1 per cent in 2016-17 against a revised 8 per cent for 2015-16. The quarterly estimate of GDP growth for the fourth quarter (January-March) of 2016-17 was 6.1 per cent.

“A sudden change in the fourth quarter is because of the change in base year,” Anant said. The base years for IIP and WPI series were revised to 2011-12 from 2004-05.