ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2023
  • Adani Saga
  • Markets
    • Stocks
    • Global Markets
    • IPO
    • Companies
    • Currency
    • Commodities
  • My Money
  • Calculators
    • Income Tax Calculator
    • Home Loan/EMI Calculator
    • Mutual Fund Returns Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • SIP calculator
    • Lumpsum Calculator
    • SWP Calculator
  • Videos
    • M Se Market
    • Jeb Zindagi Zaroorat
    • Light Camera Stocks
    • Tech Takes
    • Big Bulls Ka Nishana
    • Paisa Wasool
    • Commodity Ke MrityunjayMantra
    • The Right Property Show
  • Economy & Infra
    • Policy & Initiatives
    • Agriculture
    • Telecom
    • Aviation
    • Railways
    • Retail
    • Roadways
    • World Economy
  • Exclusive
    • Wealth Guide
    • Interviews
  • Auto
    • Cars
    • Bikes
    • Electric Vehicle
    • Commercial Vehicles
  • Tech
    • Mobiles
    • Gadgets
    • Reviews
    • Tips and Tricks
    • Apps
  • Real Estate
    • Home Buyers
    • Builders
  • Axis MF
  • Trending
    • Entertainment
    • Politics
    • Lifestyle
    • Travel
    • Sports
    • Viral
    • Education
    • Jobs
Read in App
Business News » India News

PM Modi's demonetisation drive may shave off 0.5% from India's GDP this year

GVA or Gross Value Added is a measure of the value of all goods and services produced in an economy. 

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
PM Modi's demonetisation drive may shave off 0.5% from India's GDP this year
Banking sector is likely to come out stronger from this demonetisation drive. Photo: IANS
KEY HIGHLIGHTS

In general, services sector will be affected sharply in Q3 which cannot be recouped in Q4, though the intensity will reduce over the 7 month window ending December 31st

Manufacturing gets affected on both demand conditions being low as well as SMEs managing cash. But these losses can be compensated for in Q4 to some extent.

Agricultural shocks have been witnessed in the first 2 weeks only and would get diluted by end-November.

Prime Minister Narendra Modi's 50-day shock-and-awe treatment to tackle shadow economy and tax non-compliance may lead to a 0.5% drop in India's gross domestic product (GDP). 

GDP  is a sum total of all goods and services produced in a country. 

Madan Sabnavis, Chief Economist, and Anushka Sawarkar, Associate Economist, Care Ratings, in a report titled 'Impact of demonetization on GDP growth in FY17' said, "Some of the losses in GDP incurred in these seven weeks (under third quarter) will be recovered in the next quarter, particularly for consumer goods where there would be only deferment of purchase. However, the same doesn’t stand for losses in services sector".

GVA for the services sector (including construction) is estimated to be at Rs 64,51,616 crore for the current fiscal year. This is expected to drop between Rs 29,420 crore to Rs 45,130 crore. 

India's total GVA is expected to drop between Rs 33,039 crore to Rs 54,227 crore for the year ending March 31, 2017 as against a pre-demonetisation estimate of Rs 1,04,27,191 crore. 

GVA or Gross Value Added is a measure of the value of all goods and services produced in an economy. 

GDP, simply put, is GVA with taxes minus subsidies. 

The report pointed out that the service sector is expected to be affected the most, mainly on account of losses in trade, hotel, transport due to the volume of cash transactions involved in these economic activities. "Importantly, these losses, due to their inherent nature, can’t be recovered in the next quarter," it said. 

SMEs in industry will have a major problem in adjusting production schedules as both payments and receipts flow in cash given their structures. "For rest of manufacturing, demand side issues would exist till such times conditions stabilize and could get reversed in Q4. Hence, Industry is also expected to be impacted which will be more significant in the first 2-3 weeks post the announcement," it said. 

Banking sector is likely to come out stronger from this demonetisation drive. "The gains would be positive for the banking sector due to the increase in deposits which would be countered by slowing down of other sectors in the group like real estate," CARE Ratings said. 

Agriculture sector, CARE Ratings believe, will be least impacted with with major shock being absorbed in the first 2-3 weeks itself as there have been issues in sales at mandis due to the cash crunch presently.

"The GVA numbers for FY17 in the second column have been drawn up on the assumption of growth of 7.6% for the year which was our assumption prior to the demonetisation with GDP growth projected at 7.8%," CARE Ratings said.

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
DemonetisationIndia GDPChinaNarendra ModiPhilippinesEconomy
Written By: ZeeBiz WebTeam
Updated: Fri, Nov 18, 2016
03:37 pm
Mumbai, ZeeBiz WebDesk
RELATED NEWS
Demonetisation in India: Timeline Demonetisation in India: Timeline
Demonetisation SC Verdict Today: Supreme Court to pass judgement on pleas challenging Centre's 2016 note ban Demonetisation SC Verdict Today: Supreme Court to pass judgement on pleas challenging Centre's 2016 note ban
Six years on, jury is still out on efficacy of demonetisation Six years on, jury is still out on efficacy of demonetisation
#DeMolishingCorruption trends on Twitter after PM Narendra Modi lists out demonetisation benefits on 4th anniversary #DeMolishingCorruption trends on Twitter after PM Narendra Modi lists out demonetisation benefits on 4th anniversary
Modi's demonetisation move goes viral? Singapore learns from India, to BAN its 1,000  dollar note! Here is why Modi's demonetisation move goes viral? Singapore learns from India, to BAN its 1,000 dollar note! Here is why

LATEST NEWS

I-T dept raids over 30 locations of 5 builder groups across Jaipur

Q3 Results 2023: Aditya Birla Capital, JK Tyre, Ethos declare December quarter results - HIGHLIGHTS

Government nod to Vodafone Idea to convert Rs 16,133 crore spectrum, AGR interest dues into equity

SBI's total exposure to Adani Group at Rs 27,000 crore; none against shares: Chairman Dinesh Khara

Renault upgrades cars to meet stricter emission norms

BSF Constable Recruitment 2023: Apply for 1401 vacancies - Check eligibility, pay scale and how to apply online

Q3 Results 2023: Paytm narrows loss, IndiGo's net profit soars to Rs 1,422.6 crore

Abu Dhabi to Calicut Air India Express flight IX348 catches fire

Railways plans to upgrade ticketing capacity from 25,000 to 2.25 lakh per minute: Union Minister Ashwini Vaishnaw

Q3 Results 2023: Emami December quarter PAT up 6%, Tata Power net profit doubles

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2023. India Dot Com Private Limited. All Rights Reserved.
LIVE TV