Citigroup economists Samiran Chakraborty and Anurag Jha said a combination of good monsoon rains crucial for farmers, wage hikes for public sector employees and festival demand were supportive for consumption demand. "But the sharp decline in our rural demand indicator indicate that this data point could be prone to revision in subsequent releases," they said.

A question many asked is how accurately did the quarterly GDP figures capture the impact of demonetization on India's sizable informal sectors, where much of the transactions happen in cash. Experts say the quarterly statistics use data on organized sectors as a proxy for India's unorganized sectors, implying the numbers may not accurately capture the effects.

Radhika Rao, an economist at Singapore's DBS Bank, told CNBC sub-trends suggested the formal sector might have benefited from the banknote ban, with more transactions taking place through electronic means.

The ruling Bharatiya Janata Party's (BJP) member of parliament in the upper house, Subramanian Swamy told CNBC's "Squawk Box" that much of the calculations for the informal sectors were based on "guesswork," "benchmarks" and "ratios" as opposed to raw data.

"Therefore, I won't place too much emphasis on it. The real issues are the slowdown in small-and-medium industries because of the cash crunch," Swamy said, adding public-sector banks also needed huge recapitalization and the fiscal deficit was well beyond what the government budgeted for — issues, he said, the government needed to address. But he acknowledged that it was too early to tell if the demonetization shock on the economy is over.