Hit hard by demonetisation, India lost the tag of the fastest growing economy to China in the March quarter with a GDP growth of 6.1 per cent, pulling down the 2016-17 expansion to a three-year low of 7.1 per cent.
The bad news of the economy growing at the slowest pace in three years mainly on account of poor performance of manufacturing and service sectors come at a time when the Modi government is celebrating three years in office.
The GDP growth was 8 per cent in 2015-16 and 7.5 per cent in the previous year.
The growth for the 2016-17 fiscal slowed down despite very good showing by the agricultural sector.
China had reported a growth of 6.9 per cent in the January-March quarter of 2017. India had for the first time outpaced China in GDP growth rate in 2015.
As per the data released by the Central Statistics Office (CSO), the expansion in Gross Value Added (GVA) during the fourth quarter of 2016-17 fell sharply to 5.6 per cent as compared to 8.7 per cent in the comparable period of 2015-16.
For the year as a whole, the expansion in GVA works out to be 6.6 per cent, down from 7.9 per cent a year ago.
The GVA has been declining for the five straight quarters since January-March, 2016.
On November 9, 2016, the government had demonetised higher value currency which wiped off about 87 per cent of notes in circulation, leading to a severe cash crunch and disruption in the economic activities.
When asked whether note ban has impacted fourth quarter growth, Chief Statistician T C A Anant said a separate analysis is needed, though he admitted that this was one of the dynamics which might have impacted economic performance in third and fourth quarters.
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