New Delhi: Amid warnings of a cash crunch hitting business activity, government data released on Friday showed that the economy would grow at a slower pace of 7.1 per cent this fiscal, as against 7.6 per cent last year. This was mainly due to the poor showing by manufacturing, mining and construction sectors, and did not factor in the impact of demonetisation.
Despite the estimated fall in GDP growth, India will still be the fastest growing economy in the world. Most private economists have pared India’s growth forecast to 6.3-6.4 per cent for 2016-17, citing the impact of the government’s scrapping of high-value bank notes last November. Former prime minister Manmohan Singh had pegged the fall in growth due to demonestiation at 2 per cent.
The GDP estimate is a cornerstone of finance minister Arun Jaitley’s Budget on February 1. But the Central Statistics Office said the projection was mostly based on data available by the end of October.
