Impact of demonetisation showing to be transient: Naushad Forbes on the recent GDP figure

MUMBAI: With GDP growth rate at 7%, the impact of demonetisation is showing to be transient, Naushad Forbes, president, Confederation of Indian Industry, CII, said.

"The impact of demonetisation is showing to be transient and we are likely to reach higher growth levels in the coming quarters. Most large businesses have made efforts to integrate their supply chains into cashless payment systems and this will soon yield benefits in terms of higher efficiency and productivity of the economy," Forbes said.

The CII release added that for areas like passenger vehicles and agriculture, recent data that has come out has indicated a rebound. Also, crop estimates show that agricultural production is expected to be at a record-high in the current year, on the back of a good monsoon.

With rural growth looking up, companies are positive about consumption growth across sectors. On the investment climate, Forbes said, "The government has provided a positive environment for a turnaround to take place. The Budget has increased allocations for public investments and reduced tax rates for the small and medium sector. GST implementation is also going ahead as per the schedule.”

The release also said that it is evident that consumers are embracing the ease of making digital and cashless payments and many have switched to these instruments even in rural areas.

Cash ban, which also had a well-accentuated speak of "going digital" has established a before and after in the use of digital means for payments. According to a report bu Nielsen, titled, Demonetisation: The Nielsen View, around 1.2 crore additional customers were added in a single week to the number of Indians using digital wallets. Also, mobile payments reach had increased by 6% in the week of the announcement and recorded a highest-ever 70%.