India sees GDP growing faster than estimated after PM Modi's cash ban

An Indian bank clerk counts old high denomination Indian rupee notes after receiving them from a customer at a bank in Jammu, India on Dec 30, 2016.
An Indian bank clerk counts old high denomination Indian rupee notes after receiving them from a customer at a bank in Jammu, India on Dec 30, 2016. PHOTO: EPA

NEW DELHI (BLOOMBERG) - Prime Minister Narendra Modi's cash clampdown may hurt the Indian economy less than economists predicted.

Gross domestic product will grow 7.1 per cent in the year through March, the Statistics Ministry said in a statement in New Delhi on Friday, compared with a 6.8 per cent median estimate in a Bloomberg survey of 18 economists.

However, that's slower than last year's 7.6 per cent and the 7.7 per cent expansion predicted before his Nov. 8 decision to ban high-value bank notes.

The marginally brighter outlook may stanch record outflows from Indian stocks and help Modi win support before key state elections next month. He'd touted the move as the government's strongest step against tax evasion and graft in a nation where almost all consumer payments are made in cash.