Demonetization: Was it all Worth?
Woke up, Took bath, dressed up and hopped on to my bike. I was getting late to office. As usual, there was a lot of traffic that day and was stuck in a Traffic Signal. Saw people flocking around the ATM near that signal. Never had seen that many around that ATM. Some thing was going around it the area it seemed. As a regular daily office goer, I didn't care much and continued on my way to home.
Almost ten months, three quarters (and a fourth one just to get over) later I wonder was all that chaos all that worth. The question still remains unanswered. In Quarter 3 of FY 2016-17, the GDP managed to still grow at the rate of 7.3%. Even it Quarter 4 of FY 2016-17, the GDP grew by 7%, all thanx to backlogs & stocks piled up and the attitude of firms to show maximum sales in the last quarter to end the Financial Year on a 'good note' (of course everybody knows, its for showing maximum profits to show a growth to the Shareholders). However, the Quarter 1 of FY 2017-18 saw a growth of 5.7%, so finally demonetization showed up in the economics of India.
Further, as we are closing in for September ending Quarter, no good news has come up. The Index of Industrial Production, which was at 2.7% in March 2017 ending quarter, has come down to 1.2% sharply, as less cash has forced the production to go down, The only saving grace in it being the excessive sales by the Industries on account of Goods & Services Tax implementation.
Also, In case of Agricultural sector, the growth rate for quarter ending in June 2017 was 2.3%, around 2% lesser than the the same in September 2016 ending quarter. In spite of 96% of average rain, the sowing this season has been hesitant. Government had predicted a 2% growth in September 2017 ending quarter, but it seems to be very unlikely to achieve with lower Kharif sowing and all the prices of pulses & onion coming down.
In case of construction sector, the economics seems to be improving. The sector has started to grow at 2% in quarter ending in June 2017, as against the (-)3.7% growth in March 2017 ending quarter. The only saving grace for this quarter may be in terms of Government Spending, which has climbed up to almost 10%, 9.5% to be exact.
With all the above factors being kept in mind, its very highly likely that GDP will grow at a rate of 5.5%-6% range in the September 2017 ending quarter.
So, with two quarter's GDP growth at 5% to 6% levels and with almost all the money getting back to the economy after demonetization, the question still remains that If it was worth taking.
Woke up, Took bath, dressed up and hopped on to my bike. I was getting late to office. As usual, there was a lot of traffic that day and was stuck in a Traffic Signal. Saw people flocking around the ATM near that signal. Never had seen that many around that ATM. Some thing was going around it the area it seemed. As a regular daily office goer, I didn't care much and continued on my way to home.
Almost ten months, three quarters (and a fourth one just to get over) later I wonder was all that chaos all that worth. The question still remains unanswered. In Quarter 3 of FY 2016-17, the GDP managed to still grow at the rate of 7.3%. Even it Quarter 4 of FY 2016-17, the GDP grew by 7%, all thanx to backlogs & stocks piled up and the attitude of firms to show maximum sales in the last quarter to end the Financial Year on a 'good note' (of course everybody knows, its for showing maximum profits to show a growth to the Shareholders). However, the Quarter 1 of FY 2017-18 saw a growth of 5.7%, so finally demonetization showed up in the economics of India.
Further, as we are closing in for September ending Quarter, no good news has come up. The Index of Industrial Production, which was at 2.7% in March 2017 ending quarter, has come down to 1.2% sharply, as less cash has forced the production to go down, The only saving grace in it being the excessive sales by the Industries on account of Goods & Services Tax implementation.
Also, In case of Agricultural sector, the growth rate for quarter ending in June 2017 was 2.3%, around 2% lesser than the the same in September 2016 ending quarter. In spite of 96% of average rain, the sowing this season has been hesitant. Government had predicted a 2% growth in September 2017 ending quarter, but it seems to be very unlikely to achieve with lower Kharif sowing and all the prices of pulses & onion coming down.
In case of construction sector, the economics seems to be improving. The sector has started to grow at 2% in quarter ending in June 2017, as against the (-)3.7% growth in March 2017 ending quarter. The only saving grace for this quarter may be in terms of Government Spending, which has climbed up to almost 10%, 9.5% to be exact.
With all the above factors being kept in mind, its very highly likely that GDP will grow at a rate of 5.5%-6% range in the September 2017 ending quarter.
So, with two quarter's GDP growth at 5% to 6% levels and with almost all the money getting back to the economy after demonetization, the question still remains that If it was worth taking.
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