Bikky Khosla | 07 May, 2018
a positive development India's manufacturing growth rose in April.
Though marginal, the growth, as reflected by the Nikkei India
Manufacturing Purchasing Managers Index (PMI), is encouraging. In a
similar line, output of the services sector also rose for the month,
with the seasonally adjusted Business Activity index registering an
overall increase from 50.3 in March to 51.4 in April. It is really
good to see that both the key sectors reported a positive start in
the April quarter.
is the ninth consecutive month that the manufacturing PMI remained
above the 50-point-mark, a reading that indicates expansion. Besides
strong demand that led to new business orders, another positive
factor that played a key role in manufacturing expansion was low
inflationary pressure. So, while the improved figures show that the
manufacturing economy has started the quarter on a slightly stronger
footing, they also fuel hope of rate cuts by RBI which in its
monetary policy last month had left the repo rate unchanged.
the service sector index presents a similar picture. In this case again
strong demand and easing inflationary pressure drove the sector's growth.
Additionally, job-creation accelerated at the fastest pace in more
than seven years. Meanwhile, the government last week said that it
was working on a strategy to promote services exports. This, along
with a Rs 5,000 crore plan to promote 12 champion services sectors,
will give a big push to the sector, which accounts for about 62
percent of the economy.
registered by both the sectors, supported by improved demand
conditions, gives a clear indication that the Indian economy is
gradually shrugging off the disruptions caused by a goods and
services tax (GST) and demonetisation. Additionally, with price
pressure moderating and wide expectations that it may moderate
further in April from March's five-month low, it seems unlikely that
RBI will let such an opportunity to push growth slip away.
invite your opinions.