Why the Reserve Bank cut India's 2018 growth rate

Two big bang reforms-demonetisation and goods and services tax - did not deliver what they had promised in 2017

With farm-produce prices falling after an increase in the 2017 monsoon–or kharif–crop, the muddled implementation of a new nationwide tax and the effects of the November 2016 withdrawal of 86% of India’s currency by value, India’s real growth rate for 2017-18 is 6.7%, down from 7.3% in August 2017.

“The loss of momentum in Q1 of 2017-18 and the first advance estimates of kharif foodgrains production are early setbacks that impart a downside to the outlook,” said an October 2017