On November 25, 2016, during the truncated debate on demonetisation, Prime Minister Narendra Modi's predecessor Manmohan Singh had said that the decision will shave off two percentage points from India's economic growth rate. His prediction has come true after six months.
"In my opinion, the way the scheme has been implemented will hurt agricultural growth in our country, will hurt the small industry, will hurt all those people who are in the informal sectors of the economy. And my own feeling is that the national income, that is the GDP, can decline by about 2 percentage points as a result of what has been done," Singh said while participating in the Rajya Sabha debate on Modi's demonetisation decision.
The GDP/GVA figures released by the government on May 31 showed that the former Prime Minister was spot on. GDP came at 6.1 percent for the March 2017 quarter (Q4), much lower than 7.9 percent in the corresponding period last year, while GVA (GDP minus taxes) plunged to 5.6 percent for Q4 from 7.4 percent in the March 2016 quarter.
Union Finance Minister Arun Jaitley, however, blamed India's low growth rate to a general slowdown in the global economy.
Reminder: GVA growth for Jan-Mar 2016 was 8.7%. For Jan-Mar 2017, 5.6%. MMS was right, his "2% fall" prediction was an underestimate
— Mihir Sharma (@mihirssharma) May 31, 2017
