NEW DELHI: Higher than expected GDP growth in the October-December quarter belies “exaggerated claims” that the note-ban had severely impacted the economy, Finance Minister Arun Jaitley said on Wednesday. Data released by the Central Statistics Office (CSO) on Tuesday had put GDP growth during the quarter at seven per cent.
“Demonetisation, admittedly, had led to the squeeze of currency because this was the period during which the replacement of high denomination currencies was taking place and many people were apprehensive to what its impact on overall growth would be,” he said. But, “I had consistently maintained that the revenue (tax collection) figures, which actually show the real level of growth, indicated that the growth was there, and some areas could be adversely impacted, particularly those which were cash dominated and also a part of the shadow economy and even constituted parts of the informal economy.”
The minister also noted that demonetisation of old high-value notes had led to another positive — the integration of the informal and formal economies. “The money that was deposited in the banks is now being spent through a system which is being recorded,” he observed.
The growth in agriculture, recorded at 4.4 per cent by the CSO, has also had a net positive impact on growth, pulling up overall numbers. “High rate of agriculture growth has contributed to Q3 GDP. Also, manufacturing increase has contributed to the Q3 GDP and this was already reflected in the VAT data of the states and also the excise data of the Central revenue collection,” he said.
The future, Jaitley said, was only going to get better. “I think a combination of remonetisation, the resilience of Indian economy and some signs of growth returning globally are evident and therefore I do expect in the future quarters this figure itself will grow further.”