What the Economic survey has to say about demonetisation, GST

The Chief Economic Advisor for the government, Arvind Subrmanian released the annual economic survey report of the last year and decried both demonetisation and GST as obstacles in the economic growth causing deceleration and slowing while the world economy accelerated.

He however ended optimistically, saying that the economy improved in the second half of 2017 and projected that real GDP growth will rise to 7-7.5% in the coming fiscal year, thereby “reinstating India as the world’s fastest growing major economy”.

India’s economy “temporarily decoupled, decelerating as the rest of the world accelerated

The annual report said that, The reason lay in the series of actions and developments that buffeted the economy: demonetisation, teething difficulties in the new GST, high and rising real interest rates, an intensifying overhang from the TBS challenge, and sharp falls in certain food prices that impacted agricultural incomes.”

“India’s investment decline seems particularly difficult to reverse, partly because it stems from balance sheet stress and partly because it has been usually large. Cross-country evidence indicates a notable absence of automatic bounce-backs from investment slowdowns. The deeper the slowdown, the slower and shallower the recovery”.