India’s GDP has clocked a growth of 7 per cent in the October- December quarter of the last year against expectations of a slowdown in growth due to the demonetisation of high-value bank notes in November last year.
With the latest data coming out, India has retained the title of the fastest growing major economy in the world.
The figures released by India’s Central Statistics Office showed an economic growth of 7 per cent in October-December quarter, marginally lower than the preceding quarter’s 7.4 per cent. Some economists had predicted the growth figures to slide to 6.4 per cent in the quarter due to the demonetisation and the resultant cash crunch. India’s central bank- the RBI also cut the growth projection for 2016-17 to 6.9% from earlier 7.1 percent due to cash squeeze.
India’s Economic Affairs Secretary Shaktikanta Das said the projection of negative effect of demonetisation on the GDP was exaggerated.
“All the reports on demonetisation were anecdotal and weren’t backed by any statistical data. Now we have the data in front of us,” said Mr Dad.
“The parallel process to demonetisation is remonetisation which has been nearly completed,” he added.
The CSO has maintained India’s annual growth projection for the FY 2016-17 at above 7 per cent.
Economists and observers have been amazed by India’s last quarter’s growth figures which are even higher than China’s 6.8 per cent.
“Perhaps this data is not capturing the impact of demonetisation,” chief investment officer, IDBI Federal Life Insurance Co., Aneesh Srivastava told Reuters.
“I am totally surprised and stunned to see this number,” he added.
Opposition political parties also are circumspect about the figures. Sitaram Yechuri of the Communist Party of India accused the government of faking the data.
