Economy to grow 7.5% in FY18

 A day after India lost the tag of the world’s fastest growing economy to China, with GDP growth slipping to 6.1% in the last quarter of 2016-17, NITI Aayog vice chairman Arvind Panagariya said he expects 7.5% growth in the current financial year and possibly a return to the 8% growth rate.

Issues with demonetization

• The contraction in the construction sector in the last quarter of 2016-17 could be due to many reasons including the war on black money that was the stated goal of demonetization.
• Main objective of demonetisation was to curb black money and prices of real estate have fallen by about 20%-25%, which in turn may have impacted construction activity.

Conclusion

• The government has begun compiling data from this April for a new annual employment survey to capture rural and urban job levels, with quarterly data on urban jobs. There is no credible aggregate data on employment.
• A task force on employment data headed by him has already met twice and will come up with an assessment in a few weeks.