India’s service sector activity grew at its fastest rate in 11 years

In June, the services industry in India had its highest level of activity in 11 years because to growing demand, capacity development, and favourable economic conditions. The S&P Global Purchasing Managers’ Index (PMI) for services increased to 59.2 in June from 58.9 in May, which is the highest level since April 2011. The results demonstrate a solid rebound in the services sector, which is reflected in good GST receipts.

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KEY POINTS:

• At the end of the first fiscal quarter, services companies noticed a significant increase in the volume of new business. S&P Global claims that businesses were successful in obtaining new business while raising prices.
• The poll found that rising inflation persisted as a problem for companies. One-fifth of the firms questioned reported higher expenditures, while the other four indicated no change since May, and the total rate of input cost inflation remained high by historical standards even though it eased to a three-month low in June.
• Businesses remained concerned about the forecast for commercial activity over the coming year due to persistent inflation. As a result, just 9% of businesses anticipated an increase in output, much below the long-term average.
• Data from June indicated the fastest increase in selling prices since July 2017, as numerous businesses attempted to pass some of their increased cost burden on to customers. The service economy as a whole had sharper price rises, with the biggest gains in transportation, information, and communication.

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