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India GDP FY 2017 reaches 7.1 percent


The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has released the Provisional estimates of national income for the financial year 2016-17 and quarterly estimates of Gross Domestic Product (GDP) for the fourth quarter (January-March) of 2016-17, both at constant (2011-12) and current prices.

According to the announced statistics Real GDP or GDP at constant (2011-12) prices for the year 2016-17 is estimated at Rs121.90 lakh crore showing a growth rate of 7.1 percent over the year 2015-16 of `113.81 lakh crore. GDP at current prices in the year 2016-17 is estimated at Rs151.84 lakh crore, showing a growth rate of 11.0 percent over the estimates of GDP for the year 2015-16 of `136.82 lakh crore.

Gross National Income at current prices is estimated at Rs149.94 lakh crore during 2016-17, as compared to 135.22 lakh crore during 2015-16, showing a rise of 10.9 percent. The Gross National Income (GNI) at 2011-12 prices is estimated at Rs120.35 lakh crore during 2016-17, as against the previous year’s estimate of Rs112.46 lakh crore.

In terms of growth rates, the gross national income is estimated to have risen by 7.0 percent during 2016-17, in comparison to the growth rate of 8.0 percent in 2015-16. In the row Per Capita Net National Income at current prices during 2016-17 is estimated to have attained a level of Rs103219 as compared to the estimates for the year 2015-16 of Rs94130 showing a rise of 9.7 percent.

The per capita income in real terms (at 2011-12 prices) during 2016-17 is likely to attain a level of Rs82,269 as compared to Rs77,803 for the year 2015-16. The growth rate in per capita income is estimated at 5.7 percent during 2016-17, as against 6.8 percent in the previous year.

Commenting on GDP FY 2017, Devendra Kumar Pant, Chief Economist, India Ratings & Research said, “FY17 GDP growth was marginally higher than India Ratings’ (Ind-Ra’s) estimate of 7%. GDP growth was supported by higher growth of net taxed on products (12.8%). However, GVA growth of 6.6% (Ind-Ra forecast: 6.9%) is lowest since FY15.

The impact of demonetization is clearly visible in fourth quarter GVA growth of manufacturing (declined to 5.3% from 8.2% in third quarter) and trade hotels, transport & communication and services related to broadcasting (declined to 6.5% from 8.3% in third quarter).

While banks were flushed with funds, due to subdued credit off take, GVA growth of financial, real estate and professional services declined to 2.7% in second half of FY17 from 8.1% in first half of FY17. GVA growth too declined to 6.1% in second half of FY17 from 7.2% in first half of FY17.

On expenditure side, private final consumption expenditure and exports have provided support to FY17 GDP growth. Investment in fourth quarter contracted by 2.1%, it grew by 2.4% in FY17. Exports and government expenditure supported GDP growth in second half of FY17. GDP growth declined to 6.5% in second half of FY17 from 7.7% in first half of FY17.”

Focusing on Core Sector Data he added: “After change in base year of IIP, base year of core infrastructure industries has also undergone a change to 2011-12 = 100. Other changes such as inclusion of renewable energy in electricity and weighting diagram are in line with changes in IIP.

Core infrastructure growth in April 2017 was affected by base effect; April 2016 core sector growth was highest since December 2014. Only steel and electricity provided support to core sector growth. Going forward, the core sector growth is likely to remain lackluster unless support by government’s infrastructure sector and housing push.”