March saw rise in India’s service sector activity; PMI up to 51.5

A private business survey has showed that India's service sector activity gained some strength last month, along with improved business conditions that led to creation of more jobs.

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The Nikkei/IHS Markit Services Purchasing Managers' Index (PMI) rose to 51.5 in March as against previous month’s 50.3. When PMI exceeds 50, it indicates expansion while going below 50 shows contraction.

"The Indian service sector moved further away from the demonetisation-related contractions seen towards the end of 2016 and beginning of 2017," the survey noted.

The fact that manufacturing production is at a five-month high and services sector is showing signs of revival made the seasonally adjusted Nikkei India Composite PMI Output Index stand at 52.3 in March from 50.7 in February.

"India's private sector economy stayed on an upward trajectory during March, benefiting from an upswing in demand and output. The country's rapid recovery from the demonetisation-related downturn was accompanied by job creation and softer inflationary pressures," said Pollyanna De Lima, economist at IHS Markit and author of the report.

Talking of the retail inflation, it had risen to 3.65% in February after it slowed to a five-year low of 5.17% in previous month of January, which was below the RBI’s target of 4%.

(Image source LiveMint)