India Remains Fastest Growing Major Economy Despite Cash Crackdown

India’s economy has defied expectations to retain the title of the world’s fastest-growing major economy, despite the disruption caused by Prime Minister Narendra Modi’s surprise decision in November to scrap 500 and 1,000-rupee notes.

Gross domestic product (GDP) registered 7 per cent growth in October-December quarter, down from 7.4 per cent in the previous quarter.

India’s growth was higher than China’s 6.8 per cent for the last three months of 2016.

The country’s federal statistics office retained its growth forecast for the fiscal year ending in March 2017 at 7.1 per cent.

The figures surprised economists, who had expected the economy to take a bigger hit from government’s decision last November to demonetise old 500 rupee and 1,000 rupee banknotes, taking out 86 per cent of the currency in circulation virtually overnight.

Prime Minister Narendra Modi has defended his so-called demonetisation scheme as a necessary strike against corruption.

But the move triggered massive lines outside banks in the weeks afterwards as authorities struggled to print replacement notes fast enough.

Sources; Times Of India, Deccan Chronicle, Ndtv.com