While announcing the fifth bi-monthly monetary policy, the Reserve Bank of India revised the gross value added (GVA) to 7.1% from earlier 7.6%.

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RBI said, “Outlook for GVA growth has turned uncertain after the unexpected loss of momentum by 50 basis points in Q2 and the effects of the withdrawal of SBNs (specified bank notes) which are still playing out.”

It explained two major channels which would affect the GVA growth in FY17.

Firstly, short-run disruptions in economic activity in cash-intensive sectors such as retail trade, hotels & restaurants and transportation, and in the unorganised sector. And secondly, aggregate demand compression associated with adverse wealth effects.

Demonetisation impact: GDP growth may fall to three-year lows

RBI kept repo rate unchanged at 6.25%.