The Central Statistical Organization’s advance GDP estimate for the current year indicates a decline in the country’s growth rate to 7.1%; without considering the demonetisation period. This was in contrast to 7.6% growth achieved in the last year.
According to Chief Statistician of India, TCA Anant, the slowing economy estimate is based on the first seven months (April to October 2016) of the fiscal year.
Hence, the projection doesn’t account for the demonetisation impact on the economy as the report is based on first seven months of the financial year.
Both manufacturing and service sector are expected to register reduced growth rate according to the CSO’s estimate.
Interestingly, the slowdown is despite a healthy 4.1 growth rate in agriculture. In the previous year, the growth rate was just 1.2 per cent and in few years back, the sector registered negative growth.
The manufacturing sector is expected to grow at 7.4% compared to 9.3% of the previous year. similarly, the major subsector within services – trade hotels etc is expected to grow at 6 % compared to 9% in the previous year.
The next report about the projected GDP growth rate will come on February 28, which may accommodate the impact of demonetisation on different sectors.