Demonetisation likely to pull down India’s growth further

TIL Desk/Business/New Delhi-With India’s GDP growth expected to slow down to 7.1 per cent during 2016-17 from 7.6 per cent in the previous fiscal, India Inc today said further downward risks to growth prevail as demonetisation may pull down economic growth in the next one or two quarters.

India’s GDP growth is expected to slow down to 7.1 per cent in the current fiscal mainly due to slump in manufacturing, mining and construction activities in figures which do not take into account the possible impact of demonetisation.

Given the current scenario, India Inc is pinning hopes on a growth-oriented Budget to unleash investments and set the pace for economic growth of 8 per cent and above in the near future. Finance Minister Arun Jaitley will present the Budget for 2017-18 on February 1.

The industry said policymakers should take doable steps to revive fixed investments and production of capital goods which are falling continuously, and urged the government to unveil policy initiatives to unclog the cash flows in large projects.

The ‘First Advance Estimates of National Income, 2016-17’ released by the Central Statistics Organisation (CSO) do not reflect the impact of demonetisation, effective from November 9, 2016 because the estimates are based on sectoral data available till October.