But now, it seems the withdrawal of some 86 per cent of currency from circulation has had little effect on economic growth either. This would be even more after the Economic Survey pegged GDP growth for 2016-17 at 6.5 per cent, down from 7.6 per cent last year. That caveat needs to be factored in along with another important takeaway from the CSO data, which pertains to gross fixed capital formation. The latter — an indicator of investment activity that leads to job generation in the economy — has expanded by a mere 3.5 per cent year-on-year in October-December. And that’s the real concern today, whether or not we believe that overall GDP growth is 7 per cent plus.

Source: Indian Express March 01, 2017 18:56 UTC