GDP growth to slow to 7.1% in FY17 from 7.6% a year ago: CSO estimates

Actual growth, however, may turn out to be much lower due to demonetisation

The government on Friday 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. Howevr, the actual numbers could be lower as the estimates do not take into account the effect on economic activity after a demonetisation of high-value notes in November. 

Key highlights

FY17 GDP estimated at 7.1% vs 7.6% a year ago

GVA at basic prices 7% vs 7.2%

Other growth indicators

Agriculture: 4.1%  

Mining: -1.8%

Electricity, gas, water supply: 6.5%

Construction: 2.9%

Trade, hotels, transport, communication: 6%

If it actually turns out to be true, the growth rate would be only slightly lower than the 7.2 per cent witnessed in the first half of the current financial year. As such, demonetisation has impacted economic growth slightly, according to the advance estimates of gross domestic product (GDP) released in New Delhi. 

Growth is basically expected to come from agriculture and government expenditure. Everything else seems to have recorded a smaller expansion rate in 2016-17 when compared with 2015-16.  

GDP growth for 2016-17 is also closer to the 7.2 per cent rate that the economy had clocked in 2014-15. This means, the economy could have gone back two years, though 7.1 per cent growth might also appear to be an overestimation by some economists.