Since November 8, 2016, Demonetisation has been the most debated topic, people have mixed opinions on Demonetisation and once again people have started talking about PM Modi and his demonetisation drive.
An unexpected slowdown in India’s economy has dealt it a blow in the” elephant versus dragon race”, a Chinese daily said on Friday. A commentary by a Global Times’ reporter said, the dip in India’s economy growth is the result of the Prime Minister Narendra Modi’s drastic reformist drives like demonetisation.
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According to the report of Indian Express, India lost the tag of fastest growing economy to China as Demonetisation has negative impact on India’s economic growth and slowed it down to 7.1 percent in year 2016-17, despite a very good showing in agricultural sector. India lost this tag in March quarter with the GDP growth of 6.1%. The GDP, as per the new series with base year of 2011-12 had expended by 8 per cent in 2015-16. It was 7.9% as based on the old series.
When central government demonetised 500 and 1000 currency, it was feared that it might hit the country’s economy. Opposition showed their concern towards job loss and fall in economic growth but at that time Government agencies said that this impact is short term and demonetisation is for the country. Not only the politicians but some top notched economists also favored this step of PM Modi.
“It seems that India has suffered setback in the elephant versus dragon race, with an unexpected slow down in its economy, helping China to regain the title of the fastest growing Economy in the first quarter,” the commentary by Xiao Xin said.
“The surprising slow down, it is believed, points to some underlying problems facing the Indian Economy, although the data itself has also invited controversy,” it added.
Not only the GDP Growth rate, other economic indicators also showed a slowing economy. The growth of 8 crore sectors declined to 2.5% which was 8.7% last year.According to reports, coal, crude oil and cement production recorded negative growth. If a comparison is made with Q4 2015-2016, most of the sectors have taken a downward spiral. Farm and allied sectors have shown improvement–from 1.5% last year, it has grown by 5.2%. Public administration has grown by 17% against 6% last financial year.
According to the Commentary, the country should be mindful of putting too much stress on its economy and subjecting the economy to the deeper imbalance while pressing ahead with ambitious reforms. It also added that, ” Indian Government should think twice about reformist drives as drastic as the November decision.”