India’s Services Sector
- India’s services sector stuttered in September as new business and output growth grew at the slowest pace since March, as per the S&P Global India Services Purchasing Managers’ Index (PMI), which eased to 54.3 from August’s robust 57.2 level.
- India’s services sector has been the major contributor to India’s GDP since the past two decades.
- The services industry not only makes up the majority of India’s GDP, but it has also drawn substantial foreign investment, made a big contribution to exports, and created a significant amount of jobs.
- The services industry in India encompasses a broad range of activities including trade, lodging and dining, transportation, storage, and communication, financing, insurance, real estate, commercial services, community, social, and personal services, as well as services related to construction.
What is there in the report?
- As per the S&P Global India Services Purchasing Managers’ Index (PMI), Although the services sector had growth in September for the fourteenth month running, price pressures, more competition, and “unfavourable public policies hampered progress,” according to the survey-based PMI
- The slowdown in growth also slowed the increase in employment from August. Though mood in the business sector continued to improve last month, it was at its highest point in more than 7.5 years.
- While selling price growth declined to its slowest rate since March, input cost inflation stayed similar to August levels.
- The steepest increase in user fees assessed by businesses was in the areas of transportation, information, and communication, whereas the largest increase in cost burdens was in the consumer services sector due to rising energy, food, labour, and material costs.
- As Indian economy is heavily dependent on the services sector, this latest data from the index is worrying.
- Apart from this the weak external demand weighed on overall sales, with international orders declining further will pose a challenge further and also the depreciation of Rupee will be an additional challenge.
Source The Hindu