As per Government data released on May 31, 2017, India’s Gross Domestic Product (GDP) grew at 6.1% year-on-year in fourth quarter of financial year 2016-17 i.e. during January 2017 to March 2017.
- Owing to this lower number; India lost the fastest growing economy tag to Chinese economy, which grew at 6.9% during January 2017 to March 2017.
More Information about FY 2016-17 Q4 GDP Data:
- The Q4 GDP growth was lower than the general expectation. Analysts believe that demonetisation drive of Government, weighed down on the Q4 GDP numbers, as it was the first full quarter post demonetisation.
- GDP grew at 7% in the previous quartere. October 2016 to December 2016.
- Q4 GDP growth was expected to be higher on account of the revision in the Index of Industrial Production (IIP) and Wholesale Price Index (WPI) series to the 2011-12 base year.
It is to be noted that GDP growth rate for the full year (2016-17) came in at 7.1%.
Sectoral Growth Rate for Q4 of FY 2016-17:
|Agriculture, forestry and fishing||5.2%|
|Mining and quarrying||6.4%|
|Electricity, gas, water supply and other utility services||6.1%|
|Trade, hotels, transport and communication||6.5%|
|Financial, real estate and professional services||2.2%|
|Public administration, defence and other services||17%|
Future Prospects of Indian Economy:
On an immediate basis, early arrival of monsoon in Kerala and Government pay hikes will be positive factors contributing to economic recovery.
- However, challenges such as uneven growth, subdued private sector investment and high bad debts of PSU banks needs to be addressed.
- Global ratings agency, Moody’s Investors Service, expects India’s GDP to gradually accelerate to around 8% in the next three to four years.
- India’s biggest tax reform since independence in 1947, theGoods and Services Tax (GST) is expected to contribute 2% to the country’s GDP. GST will subsume all central and state taxes and will be rolled out across the country on July 1, 2017, bringing India under a single tax regime. Positive effects of GST on GDP will be realised by FY18.