Indian economy slows down to 7.1% in FY17; Q4 GDP at 6.1%

01 Jun 2017 Evaluate

Losing the tag of the world’s fastest growing major economy to China and showing signs of deceleration, India’s economy grew by 7.1% in the fiscal year 2016-17, in line with the official estimate, slowing from 8% in 2015-16, while for the fourth quarter of FY17, gross domestic product (GDP) slowed sharply to 6.1%, down from 7% in the previous quarter.

As per Central Statistics Office (CSO) data, real GDP at constant (2011-12) prices for the year 2016-17 is estimated at Rs 121.90 lakh crore, showing a growth rate of 7.1% over the year 2015-16 of Rs 113.81 lakh crore. In terms of gross value added (GVA), which excludes indirect taxes, the growth came in even lower at 6.6% over the GVA for 2015-16.

Almost all sectors, with the exception of agriculture, showed deceleration in the aftermath of demonetisation. Thanks to good monsoon, the agricultural sector posted a huge jump in growth as it expanded by 4.9% during 2016-17 compared to dismal growth of 0.7% in the previous year. Manufacturing sector growth for FY17 slowed down to 7.9% from 10.8% in FY16 and mining & quarrying sector fell sharply to 1.8% from 10.5% in previous year. The data further said the per capita income during 2016- 17 is estimated to have attained a level of Rs 1,03,219 as compared to the estimates for the year 2015-16 of Rs 94,130 showing a rise of 9.7 per cent.

In the fourth quarter itself, the agriculture sector GVA rose by 5.2% as compared to 1.5% in the same period of 2015-16. The manufacturing sector output in the fourth quarter slowed to 5.3% versus 12.7% in the same period of last year, the construction sector slipped into the negative territory. Mining & quarrying sector output dropped to 6.4% in the Q4FY17 as against 10.5% in the Q4FY16.

GDP at current prices in the year 2016-17 is estimated at 84 lakh crore, showing a growth rate of 11.0 percent over the estimates of GDP for the year 2015-16 of 136.82 lakh crore. Besides, Private Final Consumption Expenditure (PFCE) at current prices is estimated at 89.27 lakh crore in 2016-17 as against 79.32 lakh crore in 2015-16. Government Final Consumption Expenditure (GFCE) at current prices is estimated at 69 lakh crore in 2016-17 as against 14.11 lakh crore in 2015-16. Gross Fixed Capital Formation (GFCF) at current prices is estimated at 41.18 lakh crore in 2016-17 as against 40.03 lakh crore in 2015-16.

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