Mumbai : Demonetisation affected the country’s growth rate negatively, which led to GDP dipping to 5.7 per cent in the first quarter of 2017-18, while the Goods and Services Tax (GST) did not have much role in the decline, economist Surjit Bhalla said on Tuesday.
Bhalla has been chosen as a part-time member of the Economic Advisory Council to the Prime Minister (EAC-PM), that was constituted on Monday, to analyse economic issues and advise Narendra Modi on them. “Demonetisation did have a negative effect.
According to me, it may have contributed to 0.4 percentage decline. But GST, may be, caused only 0.1 per cent decline,” he told a private TV channel.
He said that India’s growth potential stood at 8 per cent and it was important to analyse what factors resulted in about two percentage points decline in the GDP in the first quarter. “We have a question to address, why did this happen?,he said.
