1. Demonetisation, GST to eat off India’s economic growth even next year

Demonetisation, GST to eat off India’s economic growth even next year

The after-effects of the demonetisation exercise and the GST implementation will continue even into the next financial year, the OECD has said while cutting India's growth forecast for fiscal 2018-19 by half a percentage point.

By: | Published: September 21, 2017 6:32 PM
india, gdp, gross domestic product, BMI research, BMI RESEARCH, GDP growth india The after-effects of the demonetisation exercise and the GST implementation will continue even in 2018, the OECD predicts. (Image: Reuters)

The after-effects of the demonetisation exercise and the GST implementation will continue even into the next financial year, the OECD has said while cutting India’s growth forecast for fiscal 2018-19 by half a percentage point.

The Organisation for Economic Co-operation and Development (OECD) forecasts growth outlook of India in 2018-19 at 7.2%, down by 0.5%. The Paris-based think tank had earlier projected India’s economy to expand at 7.7% in 2018-2019, but did a downward revision in the country’s growth predictions. The inter-governmental economic organisation has also cut growth outlook for this year at 6.7 per cent, down 0.6 point from the forecast earlier made in June, even as it raised global growth forecast for 2018 to 3.7%, reported AFP.

“In India, the transitory effects of demonetisation and of the implementation of the Goods and Services Tax (GST) have led to a downward revision in 2017 growth projections”, said the OECD .

Earlier this year, OECD Secretary-General Angel Gurria year had cautioned India against complacency by policy makers. Gurria also predicted that the demonetisation would continue to “bite” in the coming quarters, PTI reported.

“There is no time for complacency. The reform momentum must be maintained,” he had said while suggesting that India should take steps to revise the labour laws, handle banks’ stressed assets and ease stringent product regulations.

The OECD has also warned that the global growth is not secure due to weak investment by businesses and slow growth in trade.

  1. S
    sk
    Sep 22, 2017 at 12:32 pm
    This is proof that black money in deed flourished in India. Many just wanted to make money and not pay government. Peoples demand to have cons utional rights can be met if the underworld black economy comes to correct itself for clean economy. Transition to clean economy will take few more quarters for sure but that pill is good for our children's health.
    Reply
    1. S
      SW
      Sep 22, 2017 at 10:56 pm
      The biggest black money lies with the government itself. With all the taxes paid in the form of mulitilevel GST, IT etc etc.what happens to the money. PM and leaders go on trips half of the time, shows the Islamic origin language Hindi, and offers free bies. Best form of tax is electronic remittance of point of , and other electronic transaction and no further tax needed. It is the government which is not transparent, the PM is enjoying unwanted tours. Government and politicians and IT officials who are the most biggest earners of black money not common man or road side vendor. Cash, like it or not is THE MOST IMPORTANT FORM of economy, an entire country WITHOUT A GOVERNMENT has no government yet has a strong currency, its the power of cash, that country is the backward country of Somalia. A country with a billion people should have 100 times more airports than that 'country' but has less. The more taxes the more damage. People will just lose jobs. Bad for economy.
      Reply

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