The chart shows the growth of the non-farm, non-government part of the Indian economy since the first quarter (Q1) of fiscal year 2014 (FY14).

The data, taken from an IndusInd Bank Ltd report on the recent gross domestic product numbers, shows real growth in non-farm private sector GVA (gross value-added) measured after deducting its agriculture and “public administration, defence and other services" components from GVA.The chart indicates that non-farm private sector growth during Q4 of FY17 was the lowest in any quarter in the last four years.

Also, the numbers show a steadily decelerating rate of growth since Q4 of FY16. That suggests growth has been slowing even before demonetization and this trend was accelerated by the note ban.

That would mean remonetization would not be enough to lift the growth rate of the non-farm private sector and that the malaise in the economy runs deeper.

This may very well call for a change in the Reserve Bank of India’s (RBI’s) monetary policy stance at its forthcoming meeting.

The central bank had said in its monetary policy report last April that “RBI staff’s baseline scenario projects that real GVA growth will improve from 6.6% in Q3:2016-17 and 6.5% in Q4 to 7% in Q1:2017-18 and 7.4-7.6% in the remaining three quarters of 2017-18".

With real GVA growth falling to 5.6% in Q4 of FY17 and with inflation undershooting estimates, it may be time for RBI to relook at its estimates. The central bank’s stance would, of course, also depend on its assessment of the inflationary impact of the introduction of the goods and services tax as well as its potential to disrupt growth in the short run.

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