Lok Sabha Question No. 1120 (UNSTARRED), answered on 2017-07-21
Subject: Demonetisation
Ministry: FINANCE
Asked by: PRASUN BANERJEE, K. C. VENUGOPAL, KAUSHALENDRA KUMAR, RAJAN BABURAO  VICHARE

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS LOK SABHA

## UNSTARRED QUESTION NO. 1120 TO BE ANSWERED ON 21 ST JULY, 2017/30 TH ASHADHA SAKA, 1939

## Demonetisation

1120. SHRI PRASUN BANERJEE:

SHRI K.C. VENUGOPAL:

SHRI KAUSHALENDRA KUMAR:

SHRI RAJAN VICHARE:

## QUESTION

Will the Minister of Finance be pleased to state:

- (b) whether any other policy factors are responsible for the slow economic growth in the country and if so, the details thereof;
- (a) whether the demonetisation has made any impact on the slowdown of India's economic growth in the fourth quarter and if so, the details thereof;
- (c) whether the demonetisation has affected the manufacturing and construction sectors in the country and if so, the details thereof;
- (e) the details of expenditure incurred by the Government in printing of Rs. 500 and Rs. 2000 new notes as on date?
- (d) the details of growth rate of manufacturing and construction sectors during the last three financial years including the post demonetization quarter along with the estimated damage caused  to  the  economy  due  to  slow  GDP  growth  including  the  long  term  effect  on  the economy and the time by which the economy is likely to recover; and

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL )

- (a) & (b) The  economic  growth  of  a  country  depends  on  a  number  of  factors  including monetary factors  (which  is  partly  reflected  by  demonetisation).  Therefore,  it  is  not  possible  to isolate  the  impact  of  demonetisation  on  India's  GDP.  However,  Economic  Survey  2016-17, presented  to  the  Parliament  in  January  2017,  mentioned  that  demonetisation  had  temporarily affected real GDP and part of economic activity.
- (c)  &  (d): The  estimates  of  on  growth  of Gross  Value  Added,  i.e. GVA of  manufacturing  and construction sectors at constant (2011-12) basic prices are given below:

| Growth in Sectoral GVA (per cent)   | Growth in Sectoral GVA (per cent)   | Growth in Sectoral GVA (per cent)   | Growth in Sectoral GVA (per cent)   | Growth in Sectoral GVA (per cent)   | Growth in Sectoral GVA (per cent)   |
|-------------------------------------|-------------------------------------|-------------------------------------|-------------------------------------|-------------------------------------|-------------------------------------|
| GVA at Basic prices from            | 2014- 15                            | 2015- 16                            | 2016- 17                            | 2016-17                             | 2016-17                             |
| GVA at Basic prices from            | 2014- 15                            | 2015- 16                            | 2016- 17                            | Q3                                  | Q4                                  |
| Manufacturing                       | 8.3                                 | 10.8                                | 7.9                                 | 8.2                                 | 5.3                                 |
| Construction                        | 4.7                                 | 5.0                                 | 1.7                                 | 3.4                                 | -3.7                                |

While the growth in manufacturing, construction etc. slowed down in the second half of 2016-17, many key indicators of the economy remained robust. The positive indicators, inter alia , included acceleration in growth of exports in second half of 2016-17, higher number of foreign tourist arrivals in  the  second  half  of  2016-17  as  compared  to  second  half  of  2015-16  and  the  record-high production of food grains, etc.

- (e) New notes are being printed continuously to fulfil the needs of the public.

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