FY16 GDP growth revised up to 8.2%, FY17 unchanged at 7.1%: CSO

New Delhi: The Indian economy grew 7.1% in FY17, according to the first revised estimates, unchanged from the initial projections, although there was a sharp increase in investment in the year when the note ban was implemented.

The country’s GDP grew 8.2% in 2015-16 compared with the preliminary forecast of 8%, the second revised estimates showed. Gross fixed capital formation (GFCF), a proxy for investment, rose 10.1% in 2016-17 compared with a 5.2% rise in FY16, the Central Statistics Office (CSO) said on Wednesday.

However, according to data released by the office earlier this month, investment increased by only 2.4% in 2016-17.


“Earlier, we used to compile GFCF on the basis of capital goods in the Index of Industrial Production but now it is based on the Annual Survey of Industries (ASI) data,” a statistics department official said, explaining the spike.

“While general government and non-financial corporations have been the key engine of investment, the household sector too has shown an increase, especially in machinery and equipment,” said Devendra Kumar Pant, chief economist at India Ratings.

According to the provisional estimates, Gross Value Added (GVA) grew 7.1% in 2016-17. It was 6.6% earlier. GDP is GVA plus indirect taxes minus subsidies.

However, the official said the rate of capital formation in both estimates is similar.

Gross capital formation, or GCF, as a share of total growth declined arter. The Economic Survey 2017-18 has forecast growth at 7-7.5% in 2018-19. The CSO estimates the economy will expand 6.5% in FY18.

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“The estimates of GDP and other aggregates for the years 2014-15 and 2015-16 have undergone revision,” CSO said.

This is due to use of the latest available data on agricultural output, industrial production – especially those based on the provisional results of ASI 2015-16 and final results of ASI 2014-15 – government expenditure (replacing revised estimates with actuals for 2015-16) and availability of more comprehensive data from source agencies and state/UT Directorates of Economics and Statistics.

According to the new estimates, India’s real GDP grew 6.1%, 7.2% and 8.2% in 2013-14, 2014-15 and 2015-16, respectively, compared with preliminary rates of 6.4%, 7.5% and 8%.