Buoyed by higher-than-expected GDP growth, the country’s economic fear is over as 7 per cent expansion in third quarter belies all exaggerated claims of note ban impact on rural economy. Both Dr. Manmohan Singh and Nobel Prize winner Amrtya Sen expressed fears about the falling standards of our economy after demonetisation. A seven per cent expansion is an expected. It seemed to agree with RBI Governor’s assertion of a sharp V-shaped recovery as remonetisation picks up. The October-December quarter of 2016 was “substantially impacted by demonetisation but later on picked up surprising all the economists of this country. Note ban, admittedly had led to the squeeze of currency because this was the period during which the replacement of high denomination currencies was taking place and many people were apprehensive about the impact on overall growth and now have to eat their words. The Union Government had consistently maintained that the revenue figures, which actually show the real level of growth, indicated that the growth was there and that came rather true. But demonetisation has helped integration of informal with the formal economy and adding the money that was deposited in the banks is now being spent through a system which is being recorded appropriately. So the worst fears of the economy is as good as over.
(The views expressed by the author in the article are his/her own.)