India's growth slowed in three months through December from a revised 7.4% expansion in the previous quarter, but it was much stronger than expected.
India's economy expanded by 7 per cent in the third quarter of this financial year, belying fears that note ban would have severely impacted economic activity.
The Central Statistics Office (CSO) has retained the growth projection for the current fiscal at 7.1 per cent, as projected in the first advance estimate in January.
Meanwhile, the CSO has also marginally revised upwards the GDP estimates for the first and the second quarters to 7.2 per cent and 7.4 per cent.
It was feared that demonetisation effected in the middle of the third quarter (November 9, 2016) would have adverse bearing on various segments of the economy.
The Reserve Bank of India and other agencies like IMF and OECD had lowered GDP projections arguing that the note ban would have short-term impact on the Indian economy.
In a statement, the CSO said Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in 2016-17 is likely to attain a level of Rs 121.65 lakh crore, as against the first revised estimate of GDP for 2015-16 of Rs 113.58 lakh crore, released in January 2017.
“The growth in GDP during 2016-17 is estimated at 7.1 per cent as compared to the growth rate of 7.9 per cent in 2015-16," it said.
"Anticipated growth of real GVA at basic prices in 2016-17 is 6.7 per cent against 7.8 per cent in 2015-16," the release said.
The 'agriculture, forestry and fishing' sector is likely to show 4.4 per cent growth in its GVA during 2016-17, as against the previous year's growth of 0.8 per cent.
The second advance estimates of National Income, 2016-17, revealed that the growth in the GVA from 'manufacturing' sector is estimated to be 7.7 per cent compared to 10.6 per cent in 2015-16.
Commenting on the data, Economic Affairs secretary Shaktikanta Das said this year growth figures are on a high base of last fiscal and numbers "do not show much negative impact of demonetisation".
The per capita net national income (current price) during 2016-17 is estimated to be Rs 103,818 showing a rise of 10.2 per cent compared to Rs 94,178 during 2015-16 with the growth rate of 8.9 per cent.
Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 88.40 lakh crore in 2016-17 as against Rs 79.00 lakh crore in 2015-16. At constant (2011-12) prices, the PFCE is estimated at Rs 68.26 lakh crore in 2016-17 as against Rs 63.66 lakh crore in 2015-16.
In terms of GDP, the rates of PFCE at current and constant prices during 2016-17 are estimated at 58 per cent and 56.1 per cent, respectively, as against the corresponding rates of 57.8 per cent and 56.1 per cent, respectively in 2015-16.
The data further revealed that Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 40.97 lakh crore in 2016-17 as against Rs 39.89 lakh crore in the last fiscal.
At constant prices, the GFCF is estimated at Rs 35.55 lakh crore in 2016-17 as against Rs 35.35 lakh crore year-on-year.
"In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during 2016-17 are estimated at 26.9 per cent and 29.2 per cent, respectively, as against the corresponding rates of 29.2 per cent and 31.1 per cent, respectively in 2015-16," the CSO said.
The GFCF is expected to register growth rate of 2.7 per cent at current prices and 0.6 per cent at constant prices.
Photograph: Reuters