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Government lowers GDP forecast to 7.1 per cent for current fiscal, lowest in 3 years

India TV Business Desk New Delhi 06 Jan 2017, 19:05:24 IST
India TV Business Desk

The government today lowered the GDP forecast for the current fiscal to 7.1 per cent as compared to 7.6 per cent. According to data released by the Central Statistics Office, the per capita income during 2016-17 is expected to rise by 10.4 per cent to Rs 1,03,007 compared to last fiscal.

If the economy grows at 7.1 per cent as predicted, it will be the slowest pace of expansion in three years. In 2015-16, the economy had expanded at 7.6 per cent and at 7.2 per cent in 2014-15. The economy expanded by 7.1 per cent and 7.3 per cent in the first and second quarters of 2016-17.

Last month, the Reserve Bank of India had also reduced the GDP growth forecast from 7.6 per cent to 7.1 per cent for the current fiscal. The latest growth rate forecast is also lower than other estimates which were released before the demonetisation drive. 

Releasing the data compiled by the CSO, Chief Statistician TC A Anant said that the figures for November were available and examined but "it was felt in view of the policy of denotification of notes there is a high degree of volatility in theses figures and conscious decision was taken not make projection using the November figure". 

"The growth in GDP during 2016-17 is estimated at 7.1 per cent as compared to the growth rate of 7.6 per cent in 2015-16," Chief Statistician TC A Anant said. 

The CSO projections on national income are now in line with the Reserve Bank's estimates, which too has lowered the GDP growth prospects to 7.1 per cent. 

"Anticipated growth of real GVA at basic prices in 2016-17 is 7 per cent against 7.2 per cent in 2015-16," the CSO said. 

In value terms, the Gross Value Added (GVA) at constant prices is anticipated to increase from Rs 104.27 lakh crore in 2015-16 to Rs 111.53 lakh crore in 2016-17. 

As per the data, 'Agriculture, forestry and fishing' is expected to expand by 4.1 per cent in 2016-17 from 1.2 per cent. On the other hand, mining and quarrying is likely to shrink by 1.8 per cent after recording a growth a 7.4 per cent in 2015-16. 

Growth in manufacturing is expected to slow to 7.4 per cent (from 9.3 per cent) and construction activities to 2.9 per cent (from 3.9 per cent). 

As per the data, the per capita net national income (current prices) during 2016-17 is estimated to be Rs 1,03,007 showing a rise of 10.4 per cent as compared to Rs 93,293 during 2015-16 with the growth rate of 7.4 percent. 

The International Monetary Fund had earlier in October projected Indian economy to grow at 7.6 per cent in 2016-17. The Economic Survey had forecast a GDP growth in the range between 7 per cent and 7.5 per cent.

Analysts, however, said that the projection is unlikely to fully capture the impact of demonetisation on the economy.