India Top Stories

Demonetisation, GST contributed to the recent slowdown in Indian economy

Demonetisation, GST contributed to the recent slowdown in Indian economy

Mumbai: In a report by Care Ratings, economists have pointed out that even other agencies including ADB, OECD besides many local agencies have lowered India’s growth forecast in the recent past. It must be recalled that prime minister’s economic advisory council member Rathin Roy had made statement that IMF growth forecast goes wrong 80% of the times. The economists dismissed the claim by citing the growth forecast by other agencies such as ADB OECD.

Citing Care, Economic Times stated, ‘factors like the recent demonetization affecting both demand and supply, introduction of GST affecting especially the smaller units on the supply side, subdued private investment in the economy, lower rate of growth in government spending, slowdown in consumption spending, corporate debt overhang, prospect of interest rates increasing in the USA, have contributed to the recent slowdown in the economy.

However Care is optimistic in saying that consumption will pick up in second half of the year. This will be because of lower prices and higher wages. Economic reforms have been hailed to have a positive impact on the economy. It went on to state that the GST is expected to help push growth above 8% in the medium term.