Reflecting the impact of Prime Minister Narendra Modi's demonetisation drive, Gross Domestic Product (GDP) growth for the quarter ended December 31, 2016 contracted to 7 per cent. In the advance estimate, the increase in real GDP was also 1.9%.
CSO is not alone.
The GFCF is expected to register growth rate of 2.7 per cent at current prices and 0.6 per cent at constant prices.
The Reserve Bank of India had also cut its GDP growth forecast for this fiscal to 6.9%, but at the same time, projected a rebound in the next fiscal at 7.4%.
In its update to the World Economic Outlook (WEO) released in October, IMF said India is likely to grow 6.6% in 2016-17, against its earlier estimate of 7.6%.
The Indian economy grew at 7 per cent in the December 2016 (Q3) quarter, the slowest in eight quarters. Since all the growth estimates have moved south, any good news from the CSO would come as a surprise. This reflects poor consumer durables output sales in the last few months.
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The statement said the sectors likely to register growth rate of over 7.0% are "public administration, defence and other services", "manufacturing" and "trade, hotels, transport, communication and services related to broadcasting".
"There are widespread doubts about the accuracy of the national accounts numbers, and the unexpected strength of today's data will do nothing to allay these concerns", he said in a note to investors.
The biggest impact of demonetization was felt by small companies, according to an analysis of the October-December earnings of 2,126 companies by Care Ratings.
The third quarter number GDP numbers are an important indicator of how the economy reacted after demonetisation.
Probably a very low growth (contraction of 2.2%) in third quarter of 2015-16 could have helped propel agriculture growth to 6% in the current estimates. In terms of growth rates, the national income registered a growth rate of 11.6% in 2016-17 as against the previous year's growth rate of 10.2%.
The GDP estimate released Tuesday is based on more complete source data than were available for the "advance" estimate issued last month. For the full year of 2016-17, the GVA is 6.7% compared to 7.7% a year earlier. "The cash squeeze in the meantime will have significant implications for GDP, reducing 2016-17 growth by ¼ to ½ percentage points compared to the baseline of 7 percent", the Survey, authored by the Chief Economic Adviser, Arvind Subramanian, had said.