By Ruma Dubey

The writing on the wall for Q3FY17 GDP data was not expected to be robust, what with the quarter expected to reflect the impact of the demonetization. But before the GDP numbers came in, the core sector data was also a pointer to the very same fact.

“The effect of demonetization is difficult to come in” – that is what the Press Secretary had to day about the Q3FY17 GDP coming in at 7%.

“The numbers completely negate the effects of demonetization”-this is what the Chief Economic Advisor had to say.

Clearly the Govt thinks that note ban had no effect at all and that is what we see in these GDP numbers.

This was a shocker as one had expected some effect of demonetization to show up in these numbers. Most analysts had estimated the number to come in around 6% but coming in at 7% truly made one gawk and wonder what do these numbers actually indicate.

Obviously now the analysts say that we will have to wait for the Q4 GDP numbers to reflect the true picture. Really? Most of the major consumption companies like HUL, Bajaj Auto and the likes showed a degrowth in their Q3 results. Yet, this GDP number defies all the poor performances and shows a very robust picture. How is this even logical?

The January core sector output for came in at 3.4% v/s 5.6% in December (MoM). It was a deep contraction in cement and refinery output that pulled down the Jan core sector data, showing the pain.

The fiscal deficit for the April to January period came in at Rs.5.64 lakh crore v/s Rs.5.32 lakh crore (YoY) and that for January increased by a huge gallop to Rs.62,900 crore v/s Rs.44,100 crore (YoY).

These GDP numbers were compiled on account of improper and incomplete data coming in from the corporates and even factory output data. If this is how the Q3 GDP numbers were made, why take the effort at all?

The redeeming factor is that farm income got a booster due to good rains. According to the information furnished by the Department of Agriculture and Cooperation (DAC), the production growth of food grains during the Kharif and Rabi seasons of agriculture year 2016-17 was 9.9 percent and 6.3 per cent respectively as compared to decline of 2.3 percent and growth of 2.0 per cent respectively in the previous agriculture year. Crops including fruits and vegetables account for about 60.0 percent of GDP in ‘agriculture, forestry and fishing’ sector. Around 40.0 percent of GVA of this sector is based on the livestock products, forestry and fisheries, which is expected to register a combined growth of around 4.2 percent in 2016-17.

Somehow, these numbers have left a bad taste in the mouth. It is not that we want the numbers to reflect the demonetization effect and would have been happier if the numbers had come in much lower. But these numbers, which are based on incomplete data, having no connection whatsoever with corporate performances for Q3 and IIP data, makes one wonder about the integrity of these numbers.