Rating agency Fitch and the World Bank have explained the impact of the demonetisation move and detailed that how it will drag India’s GDP growth estimate by 0.5%.
World Bank on Wednesday said that its decelerated India’s growth for 2016-17 fiscal to a “still robust” 7 per cent from its previous estimate of 7.6 per cent due to demonetisation, but asserted that the country would regain momentum in the following years with 7.6 per cent and 7.8 per cent growth.
Further, another rating agency Fitch Ratings also forecasted India's rating to 6.9 per cent for 2016-17 from the earlier 7.4 per cent due to "uncertainty" over the benefits of demonetisation.
"The demonetisation of large denomination bank notes has caused short-term disruption in India's economy and led us to downgrade our growth forecasts for 2017," Fitch Ratings said in its latest bi-monthly newsletter released recently.
Former prime minister Manmohan Singh too cautioned the people that the worst is yet to come in the wake of demonetisation exercise which he termed as a "disaster".
In his address at the 'Jan Vedna' conclave, Singh termed demonetisation as a "disaster" and said things are going from bad to worse and that the worse is yet to come. He dismissed as "hollow claim" of Prime Minister Narendra "Modi's propaganda" that things have started looking up.
At the convention called by Congress on demonetisation, former finance minister P Chidambaram too raised questions on the note ban decision saying there was no record of the cabinet meeting of November 8 when the government had said to have taken the decision to withdraw Rs 500 and Rs 1,000 notes.