GDP growth likely to fall to 7.1 per cent, forecasts government

New Delhi: The Central Statistics Office on Friday announced the advanced GDP growth estimates claiming that the Indian economy is expected to grow at 7.1 per cent in the fiscal year 2016-17.

Chief Statistician TCA Anant said that the estimate is based on data available till October which means that the estimate is not showing the impact of demonetisation.

If the economy grows at the estimated rate of 7.1 per cent, it would be the slowest rate of expansion in past three years. In 2015-16 and 2014-15, the economy had grown at 7.6 per cent and 7.2 per cent respectively.

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The growth rate estimate is also lower than the forecast released before demonetisation. In October 2016, the International Monetary Fund (IMF) had estimated Indian economy to grow at 7.6 per cent in 2016-17.

The Statistics Office generally reveals the estimated GDP growth in the month of February every year. But as the government is planning to present the Union budget on February 1, the office released the estimate earlier.

So far in the first two quarters of the current financial year 2016-17, the economy has grown at a rate of 7.1 per cent and 7.3 per cent, respectively. According to the analysts, the GDP growth is likely to fall due to the cash crunch created following demonetisation.

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Countering the claims, Finance Minister Arun Jaitley recently claimed that the tax collections have risen significantly and so have the collections from the life insurance business, petroleum consumption, tourism and investments in mutual funds.