Ahead of Union Budget, FICCI survey blows the whistle on demonetisation

Indian economy will grow 6.8% this fiscal due to a slow down in the services and infrastructure sectors post demonetization, according to a latest round of Ficci's Economic Outlook Survey.

Ahead of Union Budget, FICCI survey blows the whistle on demonetisation

Indian economy will grow 6.8% this fiscal due to a slow down in the services and infrastructure sectors post demonetization, according to a latest round of Ficci's Economic Outlook Survey.

The annual median GDP growth forecast of 6.8% is sharply lower than the 7.3% projected in the previous round of the survey.

The survey was conducted in the months of December 2016/ January 2017 and drew responses from leading economists representing industry, banking and financial services sector.


The Central Statistical Organisation had estimated a GDP growth of 7.1% for 2016-17 earlier in January.

According to the Ficci survey, both industry and services sectors are anticipated to moderate. Industry and services sector are expected to grow by 5.7% and 8.5%, respectively in 2016-17.

"The decision of the government to demonetize high value currency notes has had an impact on the cash dependent sectors primarily belonging to the informal economy. This is expected to cause some slowdown in industrial and services sector growth," the survey observed in its findings.

The economists felt that the forthcoming Union Budget is likely to be expansionary and some fiscal stimulus is on the way from government's side. The median growth forecast for IIP has been pegged at 1.5% for the year 2016-17, with a minimum and maximum range of (-) 2.1% and 2.9%, respectively.