Latest business news

Nothing cheerful in Q3 GDP figures

Published

9 years ago

March 1, 2017

While government data claims that GDP growth in the third quarter has stayed at 7%, a closer look at the figures brings to fore the adverse effects of demonetisation

[vc_row][vc_column][vc_column_text]7 per cent growth rate new bottom line

By Parsa Venkateshwar Rao Jr

It is surprising that anyone should be surprised, shocked, elated, satisfied that that Quarter 3 economic indicators have not really gone down, and therefore infer that the November 8, 2016 demonetisation has not had any negative impact on the economy. A closer look at the figures shows that the numbers reveal no good news.

First, Q3 figures are lower than those of Q1 andQ2 for 2016-17. At constant prices (2011-12), the growth rate for Q 1 was 7.2 per cent, for Q2 it was 7.4 per cent and for Q3 7 per cent. At current prices, the figures are: Q1 (10.8 per cent), Q2 (11.8 per cent), Q3 (10.6). The sense of relief seems to arise from the fact that it was not as bad as expected. But in absolute terms, there is a distinct slip in Q3 compared to Q2, and a little less when Q3 figure is juxtaposed with Q1. To infer from this that demonetisation has not dampened growth figures is permissible indulgence but it does not speak well for the economy.

There is also need to compare the figures with 2015-16. The revised growth rate for 2016-17 is projected to be 7.1 per cent, compared to 7.9 per cent for 2015-16. The new measure for growth rate, the Gross Value Added (GVA) figure at constant prices shows that the projected growth rate for 2016-17 will be 6.7 per cent compared to the GVA growth rate of 7.8 per cent in 2015-16. It can once again be argued that this has nothing to do with demonetisation.

The other crucial indicators also show that the economy is not really picking up, demonetisation or no demonetisation. The mining and quarrying sector is set to grow at a GVA of 1.3 per cent in 2016-17 compared to 12.3 per cent in 2015-16. In the manufacturing sector, the estimated GVA growth rate for 2016-17 is 7.7 per cent compared to the 2015-16 growth rate of 10.6 per cent. The wholesale price index (WPI) for manufactured has moved from the negative territory of – (1.3) per cent in April-December 2015-16 to 2.3 per cent in April-December 2016-17.

The only positive growth figures, apart from agriculture, are in electricity, gas, water supply and other utility services, where a 6.6 per cent growth rate is expected for 2016-17 compared to the 5.1 per cent growth rate figure for 2015-16. The Index of Industrial Production (IIP) figure for electricity for April-December 2016-17 is 5.1 per cent compared to 4.5 per cent for April-December 2015-16.

Construction, one of the drivers of growth, is expected to grow at GVA rate of 3.1 per cent in 2016-17 compared to 2.8 per cent in 2015-16. Cement consumption during April-December 2016-17 has increased by 2.8 per cent, and steel consumption by 3.3 per cent. It can be seen that there is no great spurt in growth as such.

In the service sector, comprising trade, hotels, transport and communication as well as broadcasting, the GVA growth rate for 2016-17 is expected to be 7.3 per cent compared to 10.7 per cent in 2015-16. The figure of 10.7 per cent growth in the sales tax collection in the states’ accounts between April-December 2016-17 is neither here nor there.

Growth in financial, insurance, real estate and other professional services is estimated to grow at the GVA basic prices (2011-12) by 6.5 per cent compared to 10.8 per cent growth rate in 2015-16.

The only area where there has been a spurt in growth in government spending (public administration, defence and other services) where it is expected to grow at 11.2 per cent in 2016-17 compared to 6.9 per cent in 2015-16.

The difference in growth rates in Q3 of 2016-17 compared to Q3 of 2015-16, especially in case of Private Final Consumption Expenditure (PFCE) and Government Final Capital Formation (GFCF) for Q3 in 2015-16 and 2016-17, is interesting but not puzzling. The PFCE in Q3 of 2016-17 stood at 58.7 per cent compared to 57.1 per cent in 2015-16, and the GFCF for Q 3 in 2016-17 is 29.1 per cent and in Q3 of 2015-16 it stood at 30.0 per cent.

The expectation that the effects of demonetisation should have been conspicuously evident in the Q3 figures is slightly misplaced. Demonetisation came into effect on November 9, 2016 and as Q3 is concerned its effects till December 31, 2016 are to be measured. But remember that Q3 begins on October 1, 2016, and a lot of expenditure would have occurred in the festival month of October, and whatever the downward slide in the second half of Q3 will not be too visible. We need weekly measures between November 9 and December 31, 2016, to get a measure of the effects of demonetisation.[/vc_column_text][/vc_column][/vc_row]

Related Topics:Demonetisation GDP GVA Growth PFCE

Up Next

All smoke and mirrors

Don't Miss

Trump plans defence spending boost, but why?

India News

Union Budget 2026 highlights: Nirmala Sitharaman Raises Capex to Rs 12.2 Lakh Cr, West Bengal Gets Major Allocation

Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026 in Parliament today. Follow this space for live updates, key announcements, and policy insights.

Published

5 days ago

February 1, 2026

[email protected]

Finance Minister Nirmala Sitharaman arrives to present Union Budget 2026

Finance Minister Nirmala Sitharaman will shortly present the Union Budget 2026 in the Lok Sabha, marking her ninth consecutive Budget. The annual financial statement is expected to outline the government’s policy priorities, reform agenda and spending plans for the coming year. Stay tuned for live updates, key announcements and immediate reactions as the Budget speech unfolds.

Finance Minister Nirmala Sitharaman tabled her ninth Union Budget today, beginning her speech at 11 am.

Nirmala Sitharaman is set to present her ninth Union Budget today, with the finance minister scheduled to begin her speech at 11 am.

Budget 2026 live updates: Presenting the Union Budget for 2026–27, Finance Minister Nirmala Sitharaman said the occasion coincided with Magh Purnima and the birth anniversary of Guru Ravidas. She noted that over the past 12 years, India’s economic journey has been defined by stability, fiscal discipline, sustained growth and moderate inflation.

The budgeted fiscal deficit for fiscal 2026 is estimated at 4.4 per cent of gross domestic product (GDP)

Planned capital expenditure this fiscal year Rs 11.2 lakh crore

Rare earth corrdiors in Odisha and Kerala

Hi-tech tool rooms to be set up by PSUs

Construction equipment scheme to be launched

Container manufacturing scheme for Rs 10,000 crore over 5 years

Rs 10,000 crore SME Growth Fund

Semi-conductor mission to get Rs 40,000 crore

Rs 12.2 lakh crores for infrastructure development

Dedicated RITES to repurpose land of Central PSUs

20 new waterways over next 5 years to be connected

7 high-speed corridors on rail

High-level committee on banking for next phase of Viksit Bharat

Capital expenditure hike of to ₹12.2 lakh crore in Budget 2026, with West Bengal receiving a significant share of allocations.

Mahatma Gandhi Gram Swaraj Initiative aimed at boosting the khadi, handloom, and handicrafts sectors.

High-speed rail corridors: Mumbai-Pune, Pune-Bengaluru, Hyderabad-Bengaluru, Chennai-Bengaluru, Delhi-Varanasi, Varanasi-Siliguri, Pune-Hyderabad

Five university campuses to be established near industrial corridors

Lakpati Didi program expanded in Budget 2026 to reach more beneficiaries across India.

Fiscal deficit for FY26 revised to 4.4%; Budget Estimate for FY27 set at 4.3%.

TCS on overseas tour packages cut to 2% to ease travel costs

Tax holiday to foreign companies that provide cloud services by setting up data centres in India till 2047

17 cancer drugs exempted from import duties

India News

Union budget 2026 to be presented on Sunday with special trading session

The Union Budget 2026 will be presented on a Sunday for the first time in over two decades, with NSE and BSE announcing special trading sessions for the day.

Published

6 days ago

January 31, 2026

[email protected]

For the first time in more than two decades, the Union Budget will be presented on a Sunday. Finance Minister Nirmala Sitharaman is scheduled to table the Union Budget for 2026 in the Lok Sabha on February 1 at 11 am, even as the day is usually observed as a holiday for government offices and financial markets.

February 1 falls on a Sunday this year, raising questions about market operations and investor response. To ensure uninterrupted trading and immediate market reaction to budget announcements, stock exchanges have announced special arrangements for the day.

Markets to remain open on budget day

Both the National Stock Exchange and the Bombay Stock Exchange have confirmed that markets will remain open on February 1. The NSE has announced a special trading session, with the pre-open market scheduled from 9 am to 9:08 am, followed by normal trading hours from 9:15 am to 3:30 pm.

The BSE has also declared the day a special trading day, with regular market hours applicable. Trading is expected to continue across equity, derivatives, and futures and options segments.

What the Sunday budget means for investors

A weekend budget presentation is seen as offering certain advantages for market participants. With trading active on the same day, investors will be able to respond to policy announcements immediately rather than waiting for the next working day.

The Sunday timing also gives investors, analysts, and financial institutions additional time to go through detailed proposals, including tax changes, fiscal deficit targets, and sector-wise allocations. The extended window for analysis may help reduce sharp, headline-driven reactions and encourage more informed decision-making.

With fewer competing developments on a non-working day, budget announcements are also expected to receive more focused attention from markets and stakeholders.

Parliamentary schedule and key milestones

The Economic Survey is expected to be tabled on January 29, ahead of the budget presentation. The Budget Session of Parliament began on January 28 with the President’s address to a joint sitting of the Lok Sabha and Rajya Sabha.

The upcoming budget will mark Nirmala Sitharaman’s ninth consecutive Union Budget. It will also be India’s 80th budget since Independence. Since 2017, Union Budgets have been presented at 11 am on February 1, following a timing change introduced during the tenure of former finance minister Arun Jaitley.

India News

Modi says right time to invest in Indian shipping sector; meets global CEOs

Published

3 months ago

October 29, 2025

[email protected]

Prime Minister Narendra Modi on Wednesday exhorted global investors to take bets on the Indian shipping sector, pointing out that this is the “right time” for such a move.

The Prime Minister also met a select chief executives of global majors, including DP World and APM, at a specially convened meeting on the sidelines of the India Maritime Week 2025 held here.

“For all of you hailing from different countries, this is the right time to work in the Indian shipping sector and also expand (your presence),” Modi said during a public address before the closed-door meeting with CEOs.

Modi listed several targets being chased by India in the maritime sector over the next few years, and underlined the importance of the global community in the same.

“You all are an important partner who will help us achieve all our aims. We welcome your ideas, innovations and investments,” Modi said.

He said that India allows 100 per cent foreign direct investment in the shipping and ports sector, and also provides incentives under the “Make In India, and Make For The World” vision.

Addressing an audience, including leaders of various companies, the Prime Minister affirmed India’s commitment to strengthening the supply chain resilience at a global level.

He also said that India is engaged in creating world-class mega ports, and cited the work undertaken on the Vadhavan Port to the north of the financial capital, which entered the top-10 firms in the world on the first day.

The government is also looking to grow the capacity at 12 major ports by four times and increase India’s share in containerised cargo at the global level.

Later, Modi held a meeting with top CEOs of shipping sector companies from across the world.

As per people in the know, he met AP Moller-Maersk Chairman Robert Maersk Uggla, DP World Group Chairman Sultan Ahmed bin Sulayem, Mediterranean Shipping Company Chief Executive Soren Toft, Adani Ports and SEZ Managing Director Karan Adani and French company CMA-CGM’s Senior Vice President Ludovic Renou.

The participation from over 85 countries in the IMW sends a strong message, Modi said, noting the presence of CEOs of major shipping giants, startups, policymakers, and innovators at the event.

The Prime Minister also thanked Port of Singapore (PSA) for the nearly Rs 8,000 crore investment in the Jawaharlal Nehru Port Authority’s fourth terminal, pointing out that this is also the largest FDI in the port sector in India.

Modi said more than 150 new initiatives have been launched under the ‘Maritime India Vision’, resulting in nearly doubling the capacity of major ports, a substantial reduction in turnaround time, and a new momentum in cruise tourism.

—PTI