With the CSO not factoring in the demonetisation impact on GDP, the Finance Ministry on Friday said its 7.1 per cent growth estimates for 2016-17 fiscal are based on ‘real statistics’ and not ‘anecdotal evidence’.
The Central Statistics Office (CSO) today came out with Advance Estimates of National Income for 2016-17 and projected India’s GDP growth to slow down to 7.1 per cent, from 7.6 per cent in 2015-16.
However, the estimates do not take into account the impact of November 8 decision of demonetisation on 500/1,000 rupee notes on economic activity.
“Being a statistical organisation, the CSO has to go on real statistics and we cannot expect them to go on the basis of impressions and anecdotal evidence,” Economic Affairs Secretary Shaktikanta Das said.
Several economists have predicted that growth will slowdown in the near term as economic activity has taken a hit on account of note ban. Even former Prime Minister Manmohan Singh has projected economic growth to plunge by 2 per cent.
Das said: “Today whatever figures, whatever statistics are coming about the impact of demonetisation are broadly, mostly anecdotal and mostly based on anecdotal evidence.”
Outlining gross fixed capital formation as an area of concern, Das said the government will take necessary measures in that direction. Gross fixed capital formation is a barometer of investment.
“The economic survey and the budget will spell out what approach the government will take, so I would not like to pre-judge and I cannot comment on that, but as I mentioned earlier,” he said, adding tax revenues will exceed budget estimates this fiscal.
Das, however, said today’s CSO data shows that overall performance of the economy—the agriculture sector and the services sector—are doing quite reasonably well.
He said the data received by the government post demonetisation reveal that there are some “positive data also”. “The VAT collection of states, in fact, most of the states have recorded substantial improvement in VAT collection in the month of November.”
Das said when the whole world is slowing down, even developed countries are slowing down, India cannot be an exception. “The entire global economy, including the emerging economies, there is a trend of slow down, India cannot be an outlier. Among the countries India is one of the best performing country,” he said.