MUMBAI (Commoditiescontrol) – India Ratings and Research has revised its GDP growth forecast for 2016-17 to 6.8 per cent, almost 100 basis points lower than its earlier projection of 7.8 per cent. It has attributed the downward revision to fallout of the disruption caused in various activities due to the demonetisation. The drive has temporarily slowed down the growth in the economy. Economists were bullish on the growth story after the seventh pay commission award and good monsoon.
The current cash crunch will put the brakes on private consumption and cost the economy, which may further impact GDP growth in the forthcoming quarters. Government data on November 30 showed that the country's GDP accelerated to 7.3 per cent in the second quarter of this financial year from a 7.1 per cent expansion in the previous quarter.
An analysis also showed the economic cost of the demonetisation drive will be around Rs 1.5 lakh crore in 2016-17.
Meanwhile, Crisil has cut GDP growth target for the year by 100 basis points to 6.9 per cent from 7.9 per cent estimated earlier. CARE Ratings, has also downgraded its GDP growth target by 90 basis points to 7 per cent post demonetisation from 7.9 per cent earlier.
The United Nation in its ESSAP report for 2016 has optimistically pegged India’s growth in 2016-17 at 7.6 per cent, as it pegged its estimates based on Q1 numbers of national accounts.
(By Commoditiescontrol Bureau; +91-22-40015522)
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