The Big Story: Worrying numbers

Union Finance Minister Arun Jaitley on Thursday continued to downplay the impact of last year’s demonetisation decision on India’s growth trajectory. Despite the Gross Domestic Product numbers for the fourth quarter (January to March) sliding sharply to 6.1% from 8% in the same quarter last year, Jaitley said that November’s note ban, which scrapped Rs 500 and Rs 1,000 note, was not the primary reason for the economic slowdown.

In fact, Jaitley chose to strike a positive note by claiming that a 7% to 8% annual growth was “very good” by global standards. He added that the Goods and Services Tax currently being rolled out would boost the figures for the ongoing financial year. Overall, the country grew at 7.1% in 2016-’17.

Jaitley’s optimism not borne out by the numbers, which show that key sectors like manufacturing, services and construction slowed considerably in the final quarter. Take the case of manufacturing. The Gross Value Added in this sector dropped to a mere 5.3% in Q4 of 2016-’17 from 12.7% in Q4 of last year. With demonetisation creating a cash crunch and slowing down consumption, new orders dried up gradually. In Q4, construction shrank by 3.7% compared to same period last year. Bank credit to industry slowed down to 4.3% in December 2016 from 4.9% in the previous 12 months ago.

These numbers raise a far more serious question. The GDP figures do not accurately reflect activity in the informal sector, where more than 75% of India’s workforce is employed. The impact on this sector is not measured by the GDP numbers.

Despite the alarming numbers, policymakers have ceded the focus to frivolous debates like cow protection. The media has played a part in this too. On Thursday, the cow continued to dominate television discussions despite the poor GDP figures. If India is to provide a better standard of living for its people, it will have to realise that its priorities must be economic rather than cultural.

The Big Scroll

Rohan Venkat looks at the fine print of economic numbers, which reflect the impact of demonetisation.

Abhishek Dey reports on labourers who, even after six months of demonetisation, have not been able to find jobs.

Punditry

In The Hindu, Meha Dixit writes on the impact of women re-entering the public spaces in Afghanistan. Nitin Pai in the Business Standard on the options before India after having boycotted China’s One Belt Road initiative. The New York Times editorial on America’s exit from the Paris Accord.

Giggles

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