Demonetisation impact? Economic Survey 2017 projects FY18 growth between 6.75-7.5%

Economic Survey 2017: India’s economy will grow in the range of for the current financial year 2016-2017, says the Economic Survey that was tabled in the Parliament today. The survey projected growth for FY18 in the range of 6.75-7.5%. The survey has said that the cash ban move (demonetisation) can serve to be a risk to the growth forecast. The survey also cautions that a rise in oil prices would also be a risk to the growth forecast. The GDP growth rate at constant market prices for the current year i.e. 2016-17 has been placed at 7.1 per cent.

The Economic Survey is the Finance Ministry’s ‘health report card’ for the economy in the current financial year. Prepared by the Chief Economic Advisor, Arvind Subramanian, the economic survey gives an insight on the economy’s growth prospects, external factors that impact GDP growth, and the way ahead for policy focus. The Economic Survey comes a day ahead of the Budget 2017, which will be presented by Finance Minister Arun Jaitley. This time, in a first, the Budget will be presented on February 1, as against the last date of the month. Also, this time Railway Budget will be presented as a part of the main Budget.

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Meanwhile, as per the report by Central Statistics Office, the Gross domestic product (GDP) is likely to achieve annual growth of 7.1 per cent in the fiscal year 2016-17, which is slower than a provisional figure of 7.6 percent past year. This data has not factored in the post-November 8 demonetisation figures. India’s economy lost momentum in the final three months of 2016 after Prime Minister Narendra Modi’s ban on high-value notes hurt consumption and businesses but it is set to pick up this quarter, a Reuters poll found. Having posted growth of above 7 percent for six consecutive quarters, India’s gross domestic product is expected to have expanded just 6.5 percent in the October-December quarter – the weakest in nearly three years. The poll also suggested growth would remain below 7 percent in the first quarter of 2017, at 6.9 percent.

(With inputs from Agencies)