While pushing demonetisation Modi and his finance minister, Arun Jaitley had shown the green pasture to the people with a firm assurance that India was growing with a faster speed and would take over even China. They had fed the information that the GDP would be more than 7.5 per cent. But now it is clear that they simply misled the people for believing them with the simple intentions of gaining populist support.

Data from the Ministry of Statistics on Wednesday made it explicit that India lost its fastest-growing major economy tag in the fourth quarter of 2016-17, with GDP growth coming in at 6.1% compared with China’s 6.9% in the same period. Modi had come to power with the assurance to brighten the future of India and its economy, but what has been shocking is his government even could not preserve the status quo, maintaining the GDP of 8 per cent that was achieved in 2015-16.Real GDP growth also declined to 7.1 per cent, the slowest since Modi assumed office three years ago.

Modi’s think tank and his lieutenants would undoubtedly put their full might and brain to deflect the decline and put the blame on the previous regime. Already some economists and political managers have started saying that the GDP numbers were based on the new 2011-12 base year recently adopted for data including the Index of Industrial Production (IIP) and Wholesale Price Index (WPI).

The stakes were so high that Modi and his ministerial colleagues did not wink in describing anyone who criticised his demonetisation move, as anti-national, anti-poor and yes men of the rich. But the latest government statistics reveal that demonetisation has played havoc with the economy; it slowed down.

The GDP growth rate is slightly higher (than GVA growth) because of a more than proportionate increase in indirect tax net of subsidies. The provisional estimates also reveal that growth in gross value added (GVA) in January-March slumped to 5.6 per cent, the slowest in eight quarters, confirming fears that Modi's decision on November 8 last year to scrap 86 per cent of India's currency in circulation by value had derailed its economy. In the same quarter a year ago, GVA growth was 8.7 per cent.

It is worth recalling that former Prime Minister Manmohan Singh, had warned that demonetisation would crimp economic growth. In a scathing speech in the upper House soon after demonetisation, Singh had termed it a "monumental mismanagement" which could see "GDP decline by about 2 per cent". But sadly he was ridiculed by the neo-economist Jaitley who claimed that it would usher the country into a bright future.

What was most unfortunate that the rulers even accused the eminent economist like Amartya Sen of feeding with wrong information. Sen had said that the demonetisation was a façade and would not help the Indian economy. Little doubt demonetisation was bad news for the economy, however the politicians packaged it as a reform. “Even now this data does not reflect the full story as much of the disaster that the cash-dominated informal sector suffered has not been captured," said M. Govinda Rao, a former member of the Prime Minister's Economic Advisory Council.

Astonishingly instead of accepting their failures and prevail ground realities the ruling party leaders have been in the denial mode. On Wednesday Modi said in Germany in an interview to Handelsblatt, Germany's largest selling business daily, that demonetisation was a beneficial move and had "popular support". How could he indulge in such kind of politics? Does he think the people are real idiots?

Construction, which relies heavily on cash payments for labour and services, shrank by 3.7 per cent in the January-March 2017 quarter, compared with 6 per cent growth in the same period in 2016.Financial services grew by just 2.2 per cent in January-March 2017 and by 3.3 per cent in October-December 2016 as against a growth rate of 7-13 per cent in the six quarters preceding this period. Almost all sectors, with the exception of agriculture, showed deceleration in the aftermath of demonetisation.

Almost all sectors, with the exception of agriculture, showed deceleration in the aftermath of demonetisation. While the manufacturing sector output in the fourth quarter slowed to 5.3 per cent versus 12.7 per cent in the same period of last year, the construction sector slipped into the negative territory. The agricultural sector posted a huge jump in growth as it expanded by 4.9 per cent during 2016-17 compared to dismal growth of 0.7 per cent in the previous year.

Modi and Jaitley must address the real issues instead of misleading the people. They continue to remain in denial in furtherance of their narrow political agenda for short-term benefits and are not addressing the real issues.

The current GDP may not be sufficient to provide the true picture as the CSO is still to compile and collate all the relevant data of the impact of demonetisation, including the losses in jobs and production especially in the Micro, Small and Medium Enterprises (MSME) sector. The institutions monitoring the Indian economy have pegged the loss to the economy at Rs 2.50 lakh crore post demonetisation. The amount of damage due to jobloss is yet to be computed. (IPA Service)