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9
January 2017
The
advance estimate of 7.1 per cent GDP released by Central Statistical
Organisation (CSO), will have major errors as it does not include the data for
the months after demonetisation, domestic rating agency Icra has said. The Total Investment & Insurance
Solutions
The
agency on Friday pegged the expected growth for 2016-17 lower at 6.8 per cent.
"Given
the impact of demonetisation on actual activity from mid-November 2016 onward,
projecting GDP growth for the full year by extrapolating the trends up to
October 2016 for several sectors, may introduce more errors than in earlier
years. This would be particularly apt for cash intensive sectors such as
construction," Icra said in a statement. The Total Investment & Insurance Solutions
The
advance estimates released by the CSO of growth in FY2017 are unsurprising, as
they draw heavily from the available data for the first half of this fiscal, it
said.
"However,
Icra expects GDP (gross domestic product) and GVA (gross value added, which
excludes taxes and subsidies) growth for FY2017 at 6.8 per cent and 6.6 per
cent respectively, appreciably lower than the advance estimates," it said. The Total Investment & Insurance
Solutions
The CSO
pegged the country's gross domestic product at 7.1 per cent in 2016-17 compared
with 7.6 per cent in 2015-16. The Total
Investment & Insurance Solutions
The
anticipated growth of real GVA in 2016-17 is 7 per cent against 7.2 per cent in
2015-16, according to CSO estimates. The Total Investment & Insurance Solutions
"The
growth in deposits is an outlier, hence November data was not used for the
financials," India's Chief Statistician T. C. A. Anant had said, implying
that demonetisation is not a normal factor in the calculation of annual
national income. The Total Investment
& Insurance Solutions
Icra
said: "Given the unfolding trends, we expect actual FY2017 growth to be
lower than the advance estimates for sub-sectors such as manufacturing,
agriculture, electricity and construction."
In
contrast, the recent uptick in commodity prices may well result in a somewhat
improved GVA performance of the mining sector in H2 FY2017 as compared to the
year-on-year decline in the first six months of FY2017, the agency added. The Total Investment & Insurance
Solutions
"Moreover,
the unavailability of corporate filings for third quarter of FY2017 and second
advance estimates of rabi output (as opposed to the available data on sowing),
are likely to constrain the accuracy of the advance estimates," the
statement said. The Total Investment
& Insurance Solutions
While
rabi sowing has grown by a healthy 7 per cent on a subdued base, activity and
incomes related to non-crop agricultural sectors including horticulture and
livestock may have been adversely impacted by the liquidity crunch, it added.The Total Investment & Insurance
Solutions
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