The official estimates released by government recently, show a robust 7% growth in GDP, belying the effect of demonetisation on the economy. According to Prof. Surjait Majumdar, the growth figure is over estimated and is based on a faulty methodology. He explains that methodology of GDP estimation, that is being followed since 2011-12, underestimates the impact demonetization on the informal sector which is the major provider of employment. He also, explains that the evidence from other indicators – declining index of industrial production, reduced credit off take from banks and stagnant tax collection coupled with lack of cash for transactions, clearly indicate that economy is in stagnation.
Courtesy: Newsclick.in