India lost its fastest-growing major economy tag in the January-March period, which was the fourth quarter of the financial year (FY) 2016-17, with the Gross Domestic Product (GDP) growth coming down to 6.1 per cent compared with a provisional 7 per cent in the previous quarter.
The growth of 6.1 per cent was also lower than China’s growth in the same period which was 6.9 per cent.
The data released by the Ministry of Statistics on 31 May 2017 showed that the GDP grew 7.1 per cent in the FY 2016-17, which was slower than 8 per cent growth registered during FY 2015-16.
The GDP numbers for the FY 2016-17 was based on the new 2011-12 base year, which was adopted in recent past. The changes in the new base year also include Index of Industrial Production (IIP) and Wholesale Price Index (WPI).
India’s economic growth unexpectedly slowed to its lowest in more than two years and reports suggest that it was dragged down by construction, manufacturing and trade services.
Report on contraction in these fields are given below. It contracted 3.7 per cent year-on-year in the March quarter compared with a 3.4 per cent growth in the prior quarter.
It grew 5.3 per cent in the last quarter from a year ago, slower than an annual rise of 8.2 per cent in the December quarter.
The annual growth in these areas slowed to 6.5 per cent in the January-March period from 8.3 per cent a quarter ago.
The second reason for this unexpected slump in GDP growth in March quarter can also be attributed to Prime Minister Narendra Modi’s decision on 8 November 2016, in which he scrapped two high-value banknotes of the country, i.e. INR 1000 and 500 notes.
