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India is no longer the fastest-growing economy

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.

Data from the Ministry of Statistics on Wednesday showed GDP grew 7.1% in the financial year 2016-17, slower than the 8% registered in 2015-16. 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). Gross value added (GVA) growth was 6.6% for 2016-17 and 5.6% in the fourth quarter, compared with 7.9% in 2015-16 and 8.7% in Q4 of that year.

The “numbers show a clear slowdown in GVA,” DK Srivastava, Chief Economic Adviser at EY India, said. “That is, post-demonetisation there has been a slowdown,” he said. “The GDP growth rate is slightly higher (than GVA growth) because of a more than proportionate increase in indirect tax net of subsidies.”

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