Demonetization effect? GDP growth at 6.1% in Q4 of 2016-17

 India's economic growth slowed to 7.1% in 2016-17, the year in which 87% of the currency was demonetized, despite a very good showing by the agricultural sector.

The Gross Domestic Product (GDP) was 6.1 per in the January-March quarter, the immediate three months after the demonetization was affected on November 9, 2016. The GDP, as per the new series with base year of 2011-12, had expanded by 8% in 2015-16. It was 7.9% as based on the old series. The data released by the Central Statistics Office (CSO) revealed that the Gross Value Added (GVA) slipped sharply to 6.6% in the last financial year ended March 31, from 7.9% growth in 2015-16.

The demonetization seems to have impacted the GVA in the third as well as fourth quarter of 2016-17 which slipped to 6.7% and 5.6% respectively, from 7.3% and 8.7%. Almost all sectors, with the exception of agriculture, showed deceleration in the aftermath of demonetization.

While the manufacturing sector output in the fourth quarter slowed to 5.3% versus 12.7% in the same period of last year, the construction sector slipped into the negative territory. Thanks to good monsoon, the agricultural sector posted a huge jump in growth as it expanded by 4.9% during 2016-17 compared to dismal growth of 0.7% in the previous year.

In the fourth quarter itself, the agriculture sector GVA rose by 5.2% as compared to 1.5% in the same period of 2015-16. The data further said the per capita income during 2016- 17 is estimated to have attained a level of Rs 1,03,219 as compared to the estimates for the year 2015-16 of Rs 94,130 showing a rise of 9.7%.