New Delhi, Jan. 29: The demonetisation-hit economy, which is expected to limp back to normalcy by the middle of this calendar year, may report a GDP growth rate of around 7 per cent for 2016-17, according to North Block economists.

Of course, like all cautious economists, North Block's tribe of coffee swigging GDP forecasters and policy sherpas will add a ceteris paribus (all other things being equal), the Latin term that the followers of John Stuart Mill use to indicate they may be wrong if things do not turn out the way they see it.

The data for making the calculations in this year's economic survey will be those which the government has managed to get by the first week of January, which means December factory and farm data will have to be included.

However, one-fourth of the year's GDP figures will be guesswork as there are no past precedents or understanding of how demonetisation has played out with productive relations, North Block czars admitted in private conversations.

"Usually, we get an extra month's data as the survey is released on 27th February. Plus, we usually can figure out how the last two months will pan out given the trends in the previous months. This time it's a blinder walk," the economists said.

An earlier estimate by the Central Statistical Organisation (CSO) had projected the Indian economy to grow at 7.1 per cent this financial year - far slower than 7.6 per cent in 2015-16. The CSO forecast did not take into account the impact of demonetisation, which sucked out 86 per cent of the cash in circulation through an executive fiat on November 8.

The CSO prediction was based on data for the first seven months, that is, till the end of October.

India still nominally remains the world's fastest growing major economy, ahead of the 6.7 per cent growth in China, which is battling an industrial deceleration.

The big question is whether India can retain that position once the impact of demonetisation is fully factored in. Other independent economists have suggested the GDP growth between 6 per cent and 6.5 per cent in the current fiscal.

In last year's economic survey, North Block had set a GDP growth target of 7-7.75 per cent for the current year.

A growth rate near the lower end of the spectrum is seen as below par for the course. But economic mandarins blame it on inclement global headwinds, including Brexit, and rising protectionism among many nations in their report.

India is expected to grow up to around 8 per cent in 2017-18. "We plan to give a range for GDP growth, no single-digit targets," said officials.

India is already the sixth richest nation, just behind France and ahead of the UK, with a current GDP of $2.3 trillion, though in terms of per capita income the Asian giant is much lower down at 149.

Demonetisation, its impact and the way forward using digital platforms for transactions will form part of the survey as also strong suggestions for opting a Universal Basic Income scheme to transfer cash to poor households, similar to what countries such as Indonesia have experimented with.

The budget is not expected to have any hugely costly populist scheme as the country cannot afford one. However, North Block thinkers want the country to debate such a scheme and if possible adopt one in the years ahead.

Many economists, of course, do not agree. They feel free social goods, such as provisions for quality education and healthcare and cheap transport, are a better way to ensure minimum standards of living than cash transfers.

The survey will also discuss how India can improve its export competitiveness despite the rising wave of protectionism and attain a 3.5 per cent share of global trade in the next few years.

In the 18th century, India produced 22.5 per cent of the global GDP, while Britain accounted for just 1.8 per cent. By 1820, when the British had conquered India, the sub-continent's share of the world economy had started declining.

Centuries of colonial rule, followed by decades of slow growth as the country tried to get over a disastrous partition at the time of independence, three expensive wars as also inward-looking economic policies ensured India's share of world trade kept shrinking to near 1 per cent. However, since liberalisation in 1991, India's trade started expanding. By 2016, the country's share stood at about 2.5 per cent of global trade.

Trump effect

Japanese financial services major Nomura has downplayed the impact of the protectionist trade policies of US President Donald Trump on India as it sees only a 10-basis-point hit on GDP at 6.8 per cent in 2017, according to PTI.

It is also quick to add that Trumpnomics will hit domestic software exporters as 86 per cent of the H1B visas in the past have been cornered by Indians.

"We expect this hit on growth to be only transitory, as remonetisation, wealth re-distribution and lower lending rates should result in growth returning to above 7 per cent from the second half of 2017," Nomura said in a weekend report.