The recently released GDP figures, which indicate some moderation in growth during FY2017, also shows that our growth rate continues to remain strong at around 7 per cent. According to Dr Naushad Forbes, President, CII, “the impact of demonetisation is showing to be transient and we are likely to reach higher growth levels in the coming quarters. Most large businesses have made efforts to integrate their supply chains into cashless payment systems and this will soon yield benefits in terms of higher efficiency and productivity of the economy.”
The CII release said that for the consumer, the ease of making digital and cashless payments has become evident. Many have switched to these instruments even in rural areas. Data in many sectors, such as passenger vehicles, indicates that while sales did decline, most consumer goods sales have rebounded by now. Another area where demonetisation has had little impact is agriculture where there had been a lot of concern about the Rabi crop. Crop estimates that have now been released show that agricultural production is expected to be at a record high in the current year, as expected from the good monsoon.
With rural demand likely to remain strong, companies are looking forward to a further growth in consumption across sectors. On investments, Dr Forbes felt that “the government has provided a positive environment for a turnaround to take place. The Budget has increased allocations for public investments and reduced tax rates for the small and medium sector. GST implementation is also going ahead as per the schedule.”
With demonetisation and its effects behind us, “it is important that focus return to the many useful policy measures such as ease of doing business, make-in-india and GST that can raise our growth rate to near double digits and meet the aspirations we all have for the country“, said Dr Forbes.
“The economy is on a positive trajectory. With some help from the external environment, the economy is likely to see higher growth in FY2018,” felt Dr Forbes.