Mumbai: India’s gross domestic product (GDP) hit all time low in the past three years and slowed down to 5.7 percent in June quarter from 6.1 percent in March.
The financial, insurance, real estate and professional services sectors also slowed to 6.4 percent in this quarter from 9.4 percent a year ago.
The chief economist at HDFC Bank, Abheek Barua, said: “GDP numbers are certainly disappointing. The numbers seem to suggest that the slowdown from last quarter has intensified due to the combination of long-term slowdown and temporary shock factors like demonetisation and GST (goods and services tax) destocking.”
In a poll by Reuters, economists had forecast that the economy would grow at 6.6 percent in the first quarter. However, the GST and demonetisation affected the Indian market, giving a blow to the decision of wiping out the black money.
Prime Minister Narendra Modi had scrapped high-value currency bank notes last November, and about 86 percent was flushed out from circulation.
The RBI estimates economic activity as measured by gross value added (GVA) to expand by 7.3 per cent in the current fiscal, up from 6.6 per cent in 2016-17, according to the central bank’s annual report unveiled on Wednesday. Real gross value added (GVA) is another measure of economic activity that is arrived at by excluding net indirect taxes from GDP.