‘Increased spending can limit GDP fall’

“With 86 per cent of the cash out of circulation and replenishment facing difficulties, the Private Final Consumption Expenditure (PFCE) in the third quarter is expected to see a sizeable reduction to the extent of at least 35-40 per cent and slightly lower in the fourth quarter,” the Associated Chambers of Commerce and Industry of India said in a statement here.

“In terms of expenditure, PFCE, popularly known as – India consumption story – accounts for close to 60 per cent of the country’s Gross Domestic Product at current prices and 55 per cent at constant prices (base 2011-12),” it said pointing to the enormity of the figures involved in case of the GDP. 

The maths of the Assocham estimates point to a contraction of 2.5 per cent of the GDP in the ongoing third quarter, which will become worse for the final quarter of the fiscal.