The services activity in India driven by a marginal increase in new businesses due to improved demand rebounded in the month of March with slightly better performance.
After the disruption caused in the wake of demonetisation and GST implementation, the services industry had a disappointing fiscal year 2017-18.
As per a statement by Markit, the Nikkei India Services Purchasing Managers' Index (PMI) increased from 47.8 in February to 50.3 in March. A reading over 50 indicates economic expansion while the reading below 50 indicates contraction.
In a release Aashna Dodhia, an economist at IHS Markit said, "India's service activity stabilised at the end of the quarter, underpinned by a renewed rise in new work. Anecdotal evidence highlighted an improvement in demand conditions".
A comparatively slow increase in the input costs enabled companies in the services industry to increase prices at a much shallow pace in the month of March thus easing the burden of consumers.
The new business sub-index representative of total demand also witnessed growth in the last month of the FY 2017-18. The sub-index reported figures of 50.6 as against 48 in the previous month signaling increase in the level of new work.
The composite index that considers performance of both the manufacturing and services industry rose to 50.8 as against 49.7 last month.