Despite a very good showing by the agricultural sector, India’s growth slowed down to 7.1 per cent in 2016-17. India also lost the tag of the fastest growing economy to China in the March quarter with a gross domestic product (GDP) growth of 6.1 per cent.
The GDP, as per the new series with base year of 2011-12, had expanded by 8 per cent in 2015-16. It was 7.9 per cent as based on the old series. Almost all sectors showed deceleration in the aftermath of demonetisation.
According to the data released by the Central Statistics Office (CSO), the Gross Value Added (GVA) slipped sharply to 6.6 per cent in the last financial year ended March 31, from 7.9 per cent growth in 2015-16. The demonetisation seems to have impacted the GVA in the third as well as fourth quarter of 2016-17 which slipped to 6.7 per cent and 5.6 per cent respectively, from 7.3 per cent and 8.7 per cent.
Almost all sectors, with the exception of agriculture, showed deceleration in the aftermath of demonetisation. While the manufacturing sector output in the fourth quarter slowed to 5.3 per cent versus 12.7 per cent in the same period of last year, the construction sector slipped into the negative territory. Only the agricultural sector posted a huge jump in growth as it expanded by 4.9 per cent during 2016-17 compared to dismal growth of 0.7 per cent in the previous year.