Expressing concern over the decline in Gross Domestic Product (GDP) for the fiscal 2016-17, former prime minister Dr. Manmohan Singh on Tuesday said the slump indicates that India's economic growth slowed down sharply primarily due demonetisation.
"India's economic growth has slowed down sharply, driven primarily by the notebandi announcement of November 8 2016. Gross Value Added (GVA), a true sub-measure of economic activity, has also experienced a steep and sustained fall," Singh said in a statement.
He further said that the private sector investment has collapsed and the Indian economy is running on just one engine of public spending.
"The GVA growth of industry has fallen from 10.7% in March 2016 to just 3.8% in March 2017, a decline of nearly seven percentage points of growth," he said.
He added that the most worrisome aspect of all this is the impact on job creation, adding that the jobs have been extremely hard to come by for the youth of the nation.
"The construction industry which is one of the largest employment generators in the country has suffered a contraction. This implies loss of millions of jobs for the nation's workplace," he said.
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Following the release of the Gross Domestic Product (GDP) Gross Value Added (GVA) figures for 2016-17 showing sliding of the economy by 1.3 percent, former finance minister P. Chidambaram on Friday trained the guns on the Centre for ridiculing the suggestions of Dr. Manmohan Singh.
"The Central Statistical Organisation (CSO) has released the GDP GVA figures for 2016-17. Finally, the bluff of the Government is called. The economy was slowing down in the middle of 2016 and we had cautioned the Government that unless it takes corrective steps, the economy will slide further. Instead of taking corrective steps, the Government decided to demonetise high-value currency. Suddenly, without any warning, Rs. 500 and Rs. 1,000 were declared legal tender and something like Rs. 14.5-15 lakh crore was pulled out of money supply," Chidambaram told ANI.
According to statistics, the GDP slowed sharply to 6.1 percent in the three months ending March 31. The GDP was 6.1 per in the January-March quarter, the immediate three months after the demonetisation was announced on November 8, 2016.
The data released by the Central Statistics Office (CSO) revealed that the Gross Value Added (GVA) slipped sharply to 6.6 per cent in the last financial year ended March 31, from 7.9 per cent growth in 2015-16.
The demonetisation seems to have impacted the Gross value added (GVA) in the third as well as fourth quarter of 2016-17 which slipped to 6.7 per cent and 5.6 per cent respectively, from 7.3 per cent and 8.7 per cent.
Almost all sectors, with the exception of agriculture, showed decline in the aftermath of demonetisation.