Despite the twin shocks of demonetisation and the implementation of goods and services tax (GST), the government said that the country’s economy grew faster than earlier projected over the last two years.
The government on Thursday revised the economic growth rate upwards to 7.2% for 2017-18 from the 6.7% estimated earlier.
“Real gross domestic product (GDP) or GDP at constant (2011-12) prices for 2017-18 and 2016-17 stand at Rs 131.80 lakh crore and Rs 122.98 lakh crore, respectively, showing growth of 7.2% during 2017-18 and 8.2% during 2016-17,” the Central Statistics Office (CSO) said.
When the note ban was announced for the year 2016-17, GDP growth has been revised higher to 8.2%, compared to the earlier estimate of 7.1%. This is the second revised estimate for this year.
The CSO further said that Gross Value Added (GVA), a preferred measure of economic activity, has also been revised to 6.9% for 2017-18, compared to 6.5% as per the provisional estimates.
Earlier, the CSO in its advance estimate had pegged the GDP growth rate for 2018-19 at 7.2%. “The First Revised Estimates for 2017-18 have been compiled using industry-wise or institution-wise detailed information instead of using the benchmark-indicator method employed at the time of release of Provisional Estimates on 31 May, 2018,” said the CSO.
For the year 2015-16 too, GDP growth has been retained at 8% in the third revised estimate, unchanged from the previous year. The revisions will push up the average growth rate over the tenure of the Narendra Modi-led government till 2017-18 to 7.44%. The earlier estimate of growth over these years was at 7.2%.
Besides, the CSO has also released the Second Revised Estimates of National Income, Consumption Expenditure, Saving and Capital Formation for 2016-17. During 2017-18, the growth rates of primary services sectors, such as agriculture, forestry, fishing and mining and quarrying, have been estimated as 5% in the previous year.
Similarly, in the secondary services sectors, comprising manufacturing, electricity, gas, water supply and other utility services, and construction, have been estimated as 6 per cent and in tertiary services sectors 8.4%.
As far as savings and investment are concerned, the first advance estimates of the government also provide the first reading of the saving rate in the economy. In 2017-18, the savings rate remained flat.
“The rate of gross savings to gross national disposable income for 2017-18 is estimated at 30.1% as against 29.9% in 2016-17. Gross capital formation, a function of gross savings and net capital inflow from abroad, also rose to 32.3% for 2017-18, compared to 30.9% for 2016-17,” the CSO added.