The GDP or gross domestic product growth fell to a three-year low of 5.7 per cent in the April-June quarter. The economy had expanded at 6.1 per cent in the March quarter and at 7.9 per cent in the April-June quarter last year. It is reported that destocking in the run-up to the July 1 launch of the goods and services tax (GST) and a lingering impact of demonetisation hurt the June quarter GDP numbers. This news comes just a day after RBI released a report according to which 99 percent of Rs 500 and Rs 1000 notes (by value) that were invalidated due to the demonetisation exercise had been returned by the end of June.
Following Prime Minister Narendra Modi’s surprise announcement of the invalidation of old high-value currency notes on 8 November 2016, estimates suggested that around Rs 3 trillion would not return to the banking system because it was unaccounted or black money. While defending demonetisation in the Supreme Court in November, then attorney general Mukul Rohatgi said around Rs 4-5 trillion would probably not find its way back into the system. By December, though, it was clear that tax evaders had managed to legalize their unaccounted money using mules and proxies to make deposits, made high-value purchases using back-dated bills and colluded with bank officials to exchange old currency. In economic term demonetisation is a huge failure. It only caused immense pain to people belonging to lower strata of society. However BJP reaped electorate benefit by winning crucial UP election due to demonetization.