Growth in the services sector slipped to a five month low in March 2012. The The HSBC Markit Business Activity index fell sharply to 52.3 in March from 56.5 the previous month, though it remained above the 50 level that divides growth from contraction for a fifth month.
India has been witnessing a slowdown for the last few quarters, as high interest rates take its toll. The GDP is expected to be around 6.9% for FY 2012, against a robust 8.4% reported in the corresponding period of the previous year.
Interest rates have continued to remain high and economists believe that this is one of the reasons for India's slowing growth. It is widely expected that the RBI would cut repo rates in its Monetary Policy Review meeting to be held on April 17, 2012, to spur growth.