Trade and growth forecasts for 2016 were lower than that of 2015, while declining wholesale inflation was not being passed to consumers as reported in December 2015.
The move to demonetise Rs 500 and Rs 1,000 notes, announced by Prime Minister Narendra Modi, on November 8, 2016, is likely to slow down economic activity in 2017, but some experts say claims are exaggerated.
Gross value added (GVA) growth for the financial year 2016-17 has been revised to 7.1% from the earlier estimate of 7.6% due to demonetisation, the Reserve Bank of India (RBI) said in its fifth bi-monthly monetary policy statement issued on December 7, 2016. Demonetisation is expected to affect cash-intensive sectors such as retail and transportation and reduce demand due to adverse wealth effects.
(Sourced from agencies, feature image courtesy:thealternative.in)
