New Delhi: India’s economic growth slipped to 5.7% in the June quarter of financial year 2017-18 against 6.1% in the preceding quarter on the back of destocking activities undertaken by the manufacturers ahead of Goods and Services Tax (GST) implementation.
Data released by the Ministry of Statistics show that GDP slowed to 5.7% in the quarter ended June 30, from 7.9% in the same period a year ago, in a further sign that demonetisation took a toll on economic growth.
The data also showed that the sectors that would have been hit by demonetization were the ones which took the biggest hit to growth.
"GDP at constant (2011-12) prices in Q1 of 2017-18 is estimated at 31.10 lakh crore, as against 29.42 lakh crore in Q1 of 2016-17, showing a growth rate of 5.7 percent.
"Quarterly GVA at basic price at constant (2011-2012) prices for Q1 of 2017-18 is estimated at 29.04 lakh crore, as against 27.51 lakh crore in Q1 of 2016-17, showing a growth rate of 5.6 percent over the corresponding quarter of previous year", Ministry of Statistics & Programme Implementation said.
"The economic activities which registered growth of over 07 percent in Q1 of 2017-18 over Q1 of 2016-17 are trade, hotels, transport & communication and services related to broadcasting, public administration, defence and other services and electricity, gas, water supply & other utility services", it added.
The sector that contributed the most to slowing economic growth was manufacturing, which tumbled to 1.2% from 10.7% a year ago.
"The growth in the agriculture, forestry and fishing, mining and quarrying, manufacturing, construction and financial, insurance, real estate and professional services is estimated to be 2.3 per cent, (-) 0.7 percent, 1.2 per cent, 2.0 percent and 6.4 percent respectively during this period", the ministry report said.
A continuation of the demonetization slowdown combined with uncertainty around the implementation of GST led to this, Statistics secretary TCA Anant said in a briefing.
The report comes a day after Reserve Bank of India (RBI) said more than 99% of the banned Rs 1000 and Rs 500 have been deposited in the banks after demonitisation, putting a huge question mark on the claims that the note ban was able to bring back the black money.