Published On: Thu, Aug 31st, 2017

Due to Demonetisation, GST- Q1 GDP growth slumped to 5.7%, Jaitley says- its matter of concern

India’s GDP growth plummeted to a 3 year low of 5.7 per cent during April-June,  lagging China for the second straight quarter.

Finance Minister Arun Jaitley today said that the 5.7 % GDP growth in Quarter 1 is a matter of concern for the government and policy makers. Arun Jaitley said, while addressing the media,  that the figures certainly pose a challenge in front of the government.

In coming quarters we really require to work on both– in terms of policy and investment– to improve upon these figures,” he added.

However, he did not rule out the immediate effects of Goods and Services Tax (GST) on the economy, especially the informal one. “Most manufacturers were de-stocking that is why trading went up as sales were taking place but stocks were being sold,” he said.

Contradiction between service improving and manufacturing going down essentially is the GST impact, he added in his address.

India’s GDP growth slumped to a three-year low of 5.7 per cent during April-June — lagging China for the second straight quarter — as manufacturing slowed ahead of the GST launch amid demonetisation effect.

China clocked a record 6.9 per cent growth in January- March as well as April-June quarters.

The expansion in gross domestic product (GDP) was 6.1 per cent in the preceding quarter and 7.9 per cent in the same period last fiscal. The previous low of 4.6 per cent was recorded in January-March 2014.

 

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