Chief Statistician of India, T.C.A.Anant, on Tuesday, underplayed the impact of the demonetisation on the economy while releasing second advance estimate of India's economic growth rate.
The ministry of statistics and programme implementation (MOSPI) said it had concluded that the full year growth rate will remain at 7.1 per cent — unchanged from its first advance estimate in January.
"Agriculture, mining and manufacturing showed higher growth in the second advance estimate," Anant said, briefing the media on the GDP numbers.
According to him, government's own data sectoral for agriculture, mining and manufacturing has shown betterment during the year.
The chief statistician said that agriculture growth of 9.1 per cent has been indicated in second advance agricultural estimate as compared to 7.7 per cent as indicated in the first advance estimate compiled by the agriculture ministry, and is based on crop sowing data.
Both mining and manufacturing had come out of negative territory and in positive realm, registering 0.9 per cent growth for mining (-0.2 pc last year) and manufacturing, showing 0.5 per cent growth (-1 pc last year).
According to the estimate of the government, sectors like financial services, insurance, real estate have borne the brunt of demonetisation and had shown disappointing growth after the move was implemented. Spending on public administration and defence too were seen to have curtailed during the year, the CSO data showed.
During the first advance estimate, the chief statistician said he had left out bank deposit numbers, which showed a huge jump, post the government's demonetisation move on November 8.
However, for second advance estimate, Anant adopted a different methodology to include them. "We have taken not only bank deposit numbers but used an aggregrate weighted average of both deposit and credit growth numbers," said Anant.
"We have seen that in the third quarter of 2016-17 while depsoit numbers have shown a growth, credit numbers have not been similarly encouraging," he added.
Asked about impact of demonetisation on consumption, Anant told THE WEEK: "Private consumption seems to have registered a slight increase during the third quarter. So we really cannot see any impact of demonetisation as the numbers seem to be slightly better than the first two quarters."
"In fact, constriction of consumption demand is not so much of a concern from the numbers as is the drop in gross capital formation in the last quarter compared to the first two," Anant said, indicating that rate of savings are witnessing further dip.
During the briefing, the chief statistician indicated that the GDP growth rate of 7.1 per cent has also seen some support due to curtailment of government subsidy expenses and a rise in collection of indirect tax revenues.
Government's capital expenditure and as well as expenditure of defence and other infrastructure projects was seen as declining in the third quarter. India's economy grew at a meagre 6.7 per cent during the third quarter this year, CSO estimates showed.
Asked why his estimates (7.1 pc growth in 2016-17) and that of the International Monetary Fund (IMF) estimate of India's GDP (6.6 pc) diverged, Anant said, the Central Statistics Office does not adopt a model-based approach to predict the growth numbers. Rather, it builds on corporate and government data in retrospective.
The second advance estimates for GDP released by the CSO have taken into account released government data so far for 2016-17 and advance results of corporate performance of listed companies for those who have so far announced their third quarter results for the fiscal.
Most companies are expected to announce their financial results for the full year only after April this year. The CSO office is expected to release its first advance estimate for the GDP for 2017-18 later in May.
