India Ratings on Friday lowered its GDP forecast for 2016-17 to 6.8 per cent from 7.8 per cent earlier, stating that the demonetisation drive will lead to an erosion of Rs 1.5 trillion this fiscal. “We have revised GDP growth forecast for 2016-17 to 6.8 per cent, 100 basis points lower than earlier projection of 7.8 per cent.
The downward revision is a fallout of the disruptions caused at various levels in the economy due to the de-legalisation of banknotes from November 9, which according to our analysis can cost economy a Rs 1.5 trillion,” it said.
It said the measure, which the Government claims root out black money, is likely to destroy Rs 4.004 trillion worth of cash held in black money and fake currencies.