The services sector activity in India has registered the fastest growth in three months time in January buoyed by recovery in new business orders as per the monthly survey.

The faster expansion is pointed out by the the Nikkei/IHS Markit Services Purchasing Managers' Index which rose to 51.7 in January as against 50.9 in the previous month. A mark above 50 on the index signifies expansion and separates growth from contraction. The index for the November month stood at 48.5.

"The recovery across India's service sector continued during January, with growth in output picking up to the joint-strongest since June 2017 as underlying demand conditions improved," said Aashna Dodhia, Economist at IHS Markit.

The higher services sector activity has pushed hiring sentiment among companies and the rate of job creation stood at the fastest since September last year.

The service providers in the country are meeting out newer business orders and increasing backlogs by increasing their workforce.

"Meanwhile, job-creation accelerated to the second strongest in over six-and-a-half years, but as firms struggled in receiving timely payments, the Goods and Services Tax (GST) continued to be a key constraint to businesses, and the service sector remained a laggard relative to its manufacturing counterpart", says Dodhia.

At the same time, manufacturing growth slowed from the 60-month high levels in the month of December and in accordance the Nikkei Composite Output Index dropped from December's 53 to 52.5 in January.

The survey said, "Overall, this was consistent with a modest improvement in operating conditions across the private sector as a whole".

With Inputs From PTI